Update: Deloitte Statement on Layoffs

As I mentioned in my Twitters on Thursday, I had the opportunity to speak with Deloitte’s National Director of Public Relations, Deborah Harrington, on the phone earlier.

Deborah, who mentioned she had been responsible for public relations for FASB before coming to Deloitte, has communicated with me via email about the blog before. She represents the only one of the Big 4 who has acknowledged this blog and the fact that some folks are reading it. Her willingness to talk on the phone today is a sign of transparency and willingness to engage that is good to see and is also demonstrated by Deloitte’s efforts to engage in Social Media.

At least they’re trying.

Ms. Harrington responded to my email asking about the authenticity of the story below that appeared on the Dow Jones Factiva site. She asked me to call and we spent about twenty minutes on the phone. She thought that the reporter had asked her for a statement because of my blog post on Monday.

She sent me a more succinct statement that she said was more accurate than the story below. In particular, we talked about the fact that the reporter wanted to compare these staff reductions to prior years. But the problem is that this kind of openness and transparency is new. There are no publicly available prior year numbers to compare this to.

As I have said before, in particular with regard to the layoffs at PwC in February that have continued since, the Big 4 do not like to talk about cuts. They have a habit of reducing staff surgically, in a thousand little cuts, across practices, geographies, offices, so that each person thinks they are unique. Those cut are often made to feel inferior and a failure, as most often the cuts are characterized as performance related and a result of forced ranking techniques. I also see the survivor rationalization too – when survivors dis’ those cut by saying they just “couldn’t make it in the Big 4″ or they were “dead wood.” Helps cut down on ongoing morale problems when the remaining staff feel more secure, safe, because they think they are superior.

Ms. Harrington made it clear on the phone, and in her statement, that the vast majority of cuts were based on the negative economic reality the firm is facing. What’s frustrating to professionals, both those cut and those left behind, is why the firms are not better at planning and forecasting.

Ms. Harrington’s official statement is as follows:

In a move to align its workforce to better reflect business and client needs, Deloitte LLP is taking a number of steps to reduce costs, including adjustments to its workforce levels in the United States. The cost-containment program is taking place across all support functions and client service units.

Part of the plan is to align our headcount according to current and projected revenues. Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.

It’s refreshing when one of the Big 4 admits that they are as vulnerable as their clients to both an economic downturn and other forces outside their control. It may not make those who have been let go feel better right now (and they are commenting), but it should help them when looking for a new job. What is disappointing is when the firms don’t manage what is within their control – recruiting, commitments to new hires, commitments to H1B visa holders,and commitments to tenured employees and those whose performance has been rewarded in the past but are now in the wrong place at the wrong time.

Ms. Harrington said that some employees were offered other positions, including opportunities to relocate. She also said that Deloitte has not rescinded any offers to students and has no plans to do so. They are still recruiting. She also listened to my comments about the difficulties that H1B visa holders have when they are suddenly let go and said she would make management aware of my concerns. I get a lot of mail about Big 4 firms cutting H1Bs first and most severely. They have a legal responsibility to these employees that goes beyond what they do for others. Are they upholding their obligations and making employees aware of their rights?

By all reports, Deloitte has severance programs in place and is doing the best they can for employees under the circumstances. But it’s the circumstances, and why they could not be better anticipated and managed, that we have an issue with, Ms. Harrington.

(Updates spokesperson’s comments in fourth paragraph and adds comments from recruiter starting in the sixth paragraph.)

DOW JONES NEWSWIRES

Global accounting firm Deloitte & Touche LLP this week began layoffs that will reduce the 45,000-strong U.S. staff by “slightly less than 2%,” a company spokesperson said Wednesday. Layoffs will occur across all departments and offices of the firm.

“Part of the plan is to rightsize our headcount according to current and projected revenues,” spokesperson Deborah Harrington said in an e-mailed statement. “Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.”

Harrington said Deloitte, like many other financial services firms, reduces its workforce annually to “meet the needs of our clients,” but did not say how this year’s cut compares to typical downsizings. While some of the reductions are based on performance reviews, Harrington said much of it is part of a cost-cutting measure.

Harrington said the firm is hiring in other departments and said the U.S. staff at the company has increased by “several thousand” over the last few years.

“Its hard to draw any broad conclusions from what Deloitte is saying, as it relates to the rest of the industry,” said Jon Zion, president of eastern US operations for financial-services recruiter Robert Half International.

With unemployment in accounting services around 2% – compared with the 5% national unemployment figure – the broader economic slowdown has not weighed as heavily on accounting industry jobs as it has elsewhere, Zion said.

“Up until this point, we are not seeing any pattern of workforce reductions” across the industry, either in the private and public sectors, Zion said.
-By Kejal Vyas, Dow Jones Newswires; 201-938-5460, kejal.vyas@dowjones.com [ 08-27-08 1627ET ]

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What we see here is a change in supply and demand. Given the current economic slowdown and as businesses crumble or are acquired (accelerated rate)… there is less companies to service. As these companies merge we as public accountants also become redundant. The Bear Stearns and Countrywide debacle should have been a huge warning signing to many in public accounting as well as D&T something was going happen sooner than later. Let's just hope we never go back to the days of 15-25%+ layoffs after busy season (pre-sox era). Talk about being used and abused!

i think that it is higher than 2% considering layoffs have been occuring. this round of layoffs may be the 2%, but they are excluding those that have already occured. Is that bad, not really. I think it shows bad leadership and greed amongst those running the firm however. Especially since their recruiting goals are near the same (even in socal which has not had a good yr)

I’m one of those left behind — all of us that are left feel misled by leadership and do not believe anything we are told regarding the end of the layoffs. I have worked for Deloitte for 10 years and I am now questioning why I even want to be left behind. I am thankful for a job in this economy, but i have certainly lost a lot of respect for Deloitte. I’m embarrassed. While the candor of the layoffs is admirable, the method has been less than ideal. The candor is coming out after the fact and was not given to the employees — only the media once the layoffs got to a level that they could not cover up. My office has had many mini-layoffs for the last 18 months – just a few people at a time every few months — which was capped off with the most recent 2% on Monday. This method serves to make those left behind scared every day that we will be next. I definitely disagree that those of us left are thinking others couldn’t cut it. I’m thinking Deloitte leadership has done a very poor job of planning and have used quarterly employee layoffs to true-up the bottom line. Very disappointing. I understand it is always about the bottom line, but there is something to be said for moral. In my ten years, I have never seen such a miserable place to work. I personally would have appreciated not receiving a firm-wide “record-growth” email just before losing a large amount of valued colleagues. Just my 2 cents.

Francine:I do not have a link. It was in the Texas WSJ version. I’ll see if I can find it. The facts were buried in another article mentioning layoffs at Lehman. The article was about six column-inches.

Francine – big news and glad you published this info. Law firms and other big companies make cuts and it gets talked about – whether they like it or not. Big4 have much greater reluctance to talk about it at all.

Thanks for posting the info. Now what about the Big 3…we know there have been RIFs there too…

Maybe talk to ATL or Dealbreaker to get some cross coverage on these issues…

I’m so suprised that the firm did it to people who work their ass off without even a grace period to help people look for another job or transfer their visas. As far as I know the layoff is across level,functions and country,OC, SF, Dallas, Detroit and NY. People who are still with the firm keeps wondering when it will end.

I too have been left behind with the same amount of clients and same amount of work, but no staff!!!!! NONE! GONE! I guess I will have to be a one-person team until i crack…..they say the strong performers in the securities group can help…i don’t think so. Being on a large job doesn’t necessary make you conducive to easily work in another and excel. Morale is bad, beyond bad…..

Great work covering the story. I think it is tough to plan these things in advance, but I do not know why accountancies hire so many new grads year after year only to reduce numbers down the line. My gripe is that firms should have a consistent message. The recruiting propaganda is sickening.

The other big 3 got around to making cuts earlier this year or even last year for those that were more forward-thinking. It's the whole "rip a bandaid off slowly or quickly" issue… looks D&T pulled it such that every hair on the skin got yanked off in the process.

I suppose this is a result of various forces at work. They would include both forece beyond the control of the firms such as the real estate meltdown and economic slowdown and the rise of AS 5(I think efficencies and cost savings will generated by force if necessary). By the way if I were working in the banking industry in particular structured transactions I would be extremely worried. I think the gravy train is over and those with other skill sets will rise to the top. In fact I am curious about the industry focus in the Big 4 related to oil and gas and other extractive industries. They have been in a slump for the better part of 30 years, but every one has their day.

To the pregnant blogger that was laid off by Deloitte … wonder the percentage of women and minorities were laid off by this self proclaimed number 1 “Diversity and Inclusion” firm … Perhaps the WSJ can research that one …

I know that in my office and my area, most of the people laid off were foreign nationals and African-Americans. Way to go with the “diversity” selling strategy.

Also, I do not understand their “excuse” of not having work for us. However, a lot of people laid off were scheduled all the way to March and others even beyond that…and the availability was very limited.

Lastly, I am bothered my management’s lies. Not too long ago, we were told that no cuts were going to be made at the firm since they care so much about people…

Excellent growth numbers last year. Huge partner payout per unit. Lay off hard working staff. Give lame excuses. Reassure the remaining staff that they won’t be laid off, although will have to work harder. Deloitte. The firm with experience, because they pulled the same tricks in 2001/2002. Same management at work.

I am one of the people who got hit in the previous wave at the end of May. To tell you the truth nobody gave us any options like transferring to any other office or any other service line, furthermore they declined it when we asked for it.On the other hand, I was only four months into the profession and was hired straight from school with the stories from their hr people about “how it is the best place to start a career.”After the lay off my pending H1 application got cancelled which forced me to move out of the united states. There were many people like me who also had no choice but to leave the country that they have been living since the past 4-8 years.Believe me, most of the bad stories are being kept under the rug.

I am in the LA office and I got laid off in the third wave of layoffs this summer. Some lady from HR called me on Monday morning and insisted she needed to schedule me an appointment with the partner in charge. I knew they were up to no good. I came downtown and they told me that they felt sorry but they needed to let me go. They took my laptop the same day and shut my email and phone. I have a “meets expectations” rating which is what most people get if they do a good job. I surely was not a poor performer. I had no time to take much of my personal files from my computer. So much about the greatest place to start a career… The partners are rolling in dough and I am getting laid off…

Also laid off after 3 years….they can slice and dice the numbers any way they want, it was a good chunk of people getting laid off this past week…2% is probably out of all of Deloitte in the US (including Tax, Consulting, FAS, etc), it’s more like 6% of the AERS practice…I’m on the West Coast, and we got hit pretty hard…as most people, not performance based, since most of those were already gone earlier in the year. I’m not bitter, but definitely disappointed it ended this way, especially based on prior claims that they were done with layoffs after the last wave…

California layoff here too… I am particularly disappointed that after the first wave of layoffs, they told us it was performance based and that they did not anticipate another one, then the second wave hit and they told us again it was performance based (which was not true) and then that they were not planning any more layoffs… and then this one which I am in… the partners should be ashamed for putting us in this situation after all our loyal services and the long nights… I would tell any student in accounting or anyone looking to join the big four to be REALLY careful about all the claims that recruiters will make to you. They will tell you anything to bring you in and then they will cut you off and say sorry if things get bad for them and then make you feel as if you are inferior or that you did something wrong in the process… Never be loyal to these guys, they are not worth it…

I was on H1B and was let go two days ago, no prior notice was given, just promoted to senior. I have only a few days to pack my stuff, inform my landlord, all the friends I have in U.S. and get a ticket (D&T is nice enough says they will buy us a air ticket) to get back home overseas. I am just sad that H1B holders are the most miserable group of laid-off people because we paid the same amount of taxes as U.S. citizens yet while we are laid off- nothing is there waiting for us, no unemployment benefits, nothing is left for us. No time for us to find a new job, what a betrayal from a firm that I worked so hard for giving up countless weekends and evenings to work???

so sad….im so sad to read the Tony’s comment. i am an international employee still working on opt and my h1b won’t be effective until Oct. I’m kinda panic coz don’t know what will happen to me next week…or after next week…i can totally understand how Tony feels. after going through so much in another country, far away from home, lonely and working ass off for a good future…everything become nothing…American Dream. how ironic

My wife just got “let go”, due to economic conditions, along side very poor performers. She was touted as a partner potential in this particular office and just month back received kudos from clients, partners etc. My biggest issue is that she is 27 weeks pregnant and we really needed those benefits. Now we are in a bind because we will be lucky if another employer even decides to interview her [her being so close to the delivery date]. I am planning on taking action after the baby is born as I do not want to stress us out. By action I mean writing to the local news paper and some national magazines. If deloitte is such a great place for women to work for, then why let go a very pregnant woman. Why?????? why can those partners not take a few thousand dollars pay cut…instead!!!!

Is there a difference between Layed off and let go? To me it means the same. Well, she was a victim of the current round of cuts. She is a US citizen. But, yes pregnant. She does not want me to make a big deal of it, because stress at this stage of pregnancy could lead to complications…

But, I am planning on writing to fortune, forbes, and several such magazines…I do not want anything from the firm, just more accountability towards pregnant women…

I work at Deloitte still and have made it past the second round.But im not as worried bc they are working me like a dog, meaning either way is ok with me…But here is a couple postings on this site I found interesting about deloitte…nothing tho on the layoffs,, http://www.corporategrade.com/user/review/63

Actually, “layoff” is a term that was traditionally used to refer to members of the trades, manufacturing, unionized production workers who were on “layoff” because of seasonal or hopefully temporary slowdowns in production. Theoretically you could get called back to the job when economic conditions improved. Unfortunately, the term is now used liberally and now often refers also to those terminated. or otherwise let go, involuntarily for any number of reasons,) masse, with no recourse due to at will employment laws.

Russell – Thank you for your advice. But my passion is to find answers to my questions and that is what I will do. And I know that we will be ok….But one word of advice from this daddy…nothing was achieved by just letting go!!!!Thanks,

Francine, any way you can ensure that this blog makes it way to the WSJ journalist who broke the story originally? The continuing abuse by those in power against the innocent really pains me. The firm is spending millions to build Deloitte university and to fund these (and other ventures), they decided to cut their loyal people. How do the one’s left behind have the motivation to work hard and produce quality work products when they suspect that they will be next? Obviously cannot trust the assurance of the partners. I suggest calling them to the carpet about their women and minority initiative. By these initiatives, this firm has gotten itself on many lists of best places to work. Hit them where it hurts.

The Dow Jones /WSJ story did not appear until later in the week, after they called the Deloitte PR person for a statement. This was due to my blog post and the other reports that started to surface on the internet as people realized what was going on.

I have spoke to that DJ/WSJ reporter and he is very interested in the people who have not been treated fairly, including those pregnant and H1B visa holders. I think you will see more press on this.

I was laid off too, and let me begin by saying that I’m sad we’re all affected by this wave of layoffs. However, I’m sorry if I’m not more sympathetic to visa holders or pregnant folks in the same boat…we all got some severance pay, we can all get COBRA for 18 months (albeit at a huge cost) and unemployment benefits when the severance runs out…I also received “2” and “3” ratings, and did not see this coming – my main point is many of us have families and other obligations…I have kids, mortgage, etc…at the end of the day, this is a capitalist country and pretty much everyone knows the partners are out for themselves…if we want job security, we should work for the government…even long-tenured directors got laid off, and sr. managers that were up for partner in prior years!! Yeah, it sucks for all affected, but I just don’t think that specific circumstances such as visa status or pregnancy are the primary reasons for such decisions…did they consider the fact that I have small kids, that I’m the sole breadwinner of the family… probably not, they just had a number of cuts in mind and had to make tough personnel decisions…think of Andersen, a whole firm collapsed a few years back…99.9% of them had nothing to do with Enron, fraud, etc…I’m very disappointed so many of us are affected, and wish everyone the best, but let’s make the best out of it and move on…

It’s an unfortunate situation for everyone involved. In particular, since any legitimate “performance” isiues should be dealt with as they occur and not in periodic cuts that confuse the issues. I am never against making sure people move on when there’s a performance issue or when there’s not a fit. But even those situations have to be handled correctly, and with compassion.

I mention the pregnant employees and visa holders (and any that were cut while on disability for example,) because an employer has special legal obligations in those cases, over and above the typical ones, which are minimal in an “at will” employment situation. Big global companies, such as the Big 4, sometimes forget about those when big numbers of cuts occcurs. And employees who don’t know their rights or have no time to ensure they are addressed are at a serious disadvantage. “Sign this release or you don’t get your severance” and you find you have signed away any rights to sue, file a claim with state department of labor or EEO or to insure all the right steps are followed. If you are in a special situation such as pregnant, on disability, over 40, a woman, minority or any and all of the above, don’t sign anything without having a lawyer read it. If you need a recommendation for one to consult with, let me know.

Great tip, Francine. Thanks for bringing this to light. While I agree that it is important to move on, it is also important that those who abuse are held accountable, because they will do it again. It would be helpful if someone could provide a link to any helpful websites about employee rights under these situations. In this case, most of the laid off people were caught off guard and unprepared. We should all know our rights so that we can best protect ourselves and our families.

My research shows the WARN act does not apply. Due to the low percentage of total employees laid off. That being said, there are other things one could do. File a complaint with the Federal EEOC or your state equivelent of the EEOC.

I was let go, I am an experienced hire over 40 years of age. D&T failed to put in my term letter that they had obligations to me as an older worker. They told me my lay off was a performance issue. News to me! My reviews had all been good. So I took my sister/lawyer in to the office to go through my personel file. There was nothing in it past July 2007. They let me go the 2nd week of August 2008. When I talked to the HR guy about what happened, that I was termed for no reason. His response, "well it happened to me once too" Yeah, that makes it right. I am truly amazed that a Big 4 can be so sloppy in their dealings with employees. Someone needs to make these people accountable.

Yes, over 40 has special conditions. And if yo sign something you still have opp for lawyer review and to rescind it.

Special conditions? Get a lawyer. Only by exerting your rights and expectations for them to act in “good faith” can you protect rights. There is nothing unprofessional or wrong about forcing a company to follow the law.

I was fired at PwC last year, just one month after the HR partner had told us during a manager meeting that there would be no terminations. Seems to be familiar Big 4 tactics then. I have worked for the Big 4 overseas and there is a worrying trend of dishonesty and unethical behaviour among the Big 4 in the US. I don’t make that comment lightly – its something that has troubled me for a long time.

What a joke Harrington's comments are. Total PR quote. D&T just posted double-digit percentage growth for the sixth year in a row (http://www.cfo.com/article.cfm/11777812/c_11780170?f=home_todayinfinance), and she's going to say "Part of the plan is to align our headcount according to current and projected revenues. Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies". Give me a break.

The real problem, as Culligan Man’s response to the linked article above states "The real reason for D&T's growth is because they have been required to move a certain percentage of their hours over to India, inconspicuously dubbed "Region 10" so as not to alert clients to the practice, where billable hours are charged at a rate of about 1/4th of those charged by US employees. It's no surprise that the largest share of Deloitte's revenue comes from its audit business, where jobs are easily outsourced to inexpensive employees while clients are billed as if they were not."

I was laid off in July in the Midwest, and they said it was not exactly considered a laid off. I was told there was nothing I could have done. I was one of the most utilized in our office in my peer group. It was a shock, but at the end of the day, it was a “business decision” and it will allow me to seek out good change. I’m looking to invest in another passion. It’s extremely difficult, and I’m not trying to minimize it, but it happens to the best of us. I am still angry about how it was handled, and I hope they realize how many lives they affected. I don’t hold this against any of the great people I met when working there. I wish others best wishes in this hardship.

Someone asked earlier who would be hit next following last week’s AERS layoffs. I have heard AERS and FAS would take hits and that Tax and Consulting were fine. We’ve seen the AERS hit, but it is not so obvious in FAS. Maybe it is because FAS headcount is so small to begin with…or maybe we just haven’t seen it hit yet.

I have friend who was on L1 visa and was let go. They told her on the same day and took all laptop, cell, etc even though they knew she would be out of status and was considered “illegal” immigrant right away. They did NOT care, however, they said “it is the firm’s policy or this is the best for the firm” like they have said to us so many times just to justify their bad decision or excuse for not willing to do anything for their employees. We have worked very hard and sacrificed a lot for the firm, but sadly, they just never cared. In my office , the morale is very bad, and we were constantly received too many abuses by management (e.g. by treatening us for poor performance rating for not doing more and more work or work on weekends, no appreciation, verbal abuses for minor mistakes), but the firm was actually chosen as the best place to work for in the area. how could that be possible???? who were the ones who filled out the surveys??? I can’t count how many tears I have shed, how many nightmares… when I first joined, I still heard them talking about their people being the most important assets for them, but I have never heard about it anymore. I guess even the management is ashamed for giving us their continuous lip services or they just simply don’t care because they have sold their souls to the devils for power???

Wow. Let me just say, I am so appalled and distraught after hearing about Deloitte doing this to their employees. I’m currently a Junior in college and I’m going through the recruiting process for the firm. All this time, I felt very comfortable and pleased — until now. I was looking forward to having an internship with them this summer, but I don’t even know if it will be worth it (going through the interview process and such), esoecially considering all the layoffs. I’m looking into Tax, but I don’t know if I’ll be safe from termination… I don’t even know if I’ll make it past my 1st year!!

I need to tell other students about this. I can’t believe the firm would want to hire so many people if all they’re going to do is just fire them.

Oh, I went to the DNLC also.. that’s when I really discovered that I liked the firm (of course, because they say all the right things). Now I’m thinking that it was all a waste.

I don’t know what to do. Would going to a Mid-Tier firm be a better choice for a college graduate?

Dear Amelie – My advice to you is to try interning with firms such as P&G, J&J etc…These companies are excellent to launch your career. Most interns and new employees are trained and looked at as a potential CEO of the future..so you start managing from day 1 – your career, great projects, and a lot of fun while doing all of that…Big 4 are such a fad….they will squeeze you as much as they can and then one day you would either quit on your own or they would just fire you and then go for the next batch of college grads…its like a sweat shop~~~if you know what I am saying….

I have also heard that Deloitte will be laying off tax people after September 15th — the big corporate tax filing deadline. Those laid off may be extra bitter because of the enormous amount of hours that they were required to work to meet the deadline.

Amelie, having a Big 4 listed on your resume looks good. Just don’t give your life to them, as they will brain wash you to do. Always remember that they are just using you. And when the better job comes along, leave and don’t look back.

…and please do not believe if they say that it is the best company for women to work for. Not true. Ask those pregnant women who got laid off…I wish there was some protection for vulnerable situations. Is there a law that helps these pregnant women from being laid off?

To all the people planning to join big 4 companies: there are plenty of careers to explore out there other than accounting and plenty of careers in accounting other than with the big four… Don’t fall for the BS they will feed you during the interview process and do not hesitate to ask the recruiter for guarantees against future layoffs written to your contracts i.e. golden parachutes… They are ruthless when they let people go so manage your career wisely and don’t be shy.

The unofficial word is that people were cut because we needed to make 'plan' or the budgeted numbers. Two weeks before D&T were meant to pay the raises for people that were eligible for such, heads started to roll.Based upon empirical evidence it would appear that the H1B holders were in fact 'targeted'. The firm did not even see fit to provide these people with some avenue to determine their options were in regards to their status. You were told you have 30days to get out of Dodge. They sent emails to follow up and make sure that the mandatory tickets they have to provide such persons were being utilized. In other words, leave, and leave fast, we do not want the stink of foreign workers tarnishing our corporate image. The very same workers that worked 14 hr days to build this cesspit of a firm.Rumour has it Barry Salzberg is trying to exact some revenge on the audit folk for the previous massacre, where tax ppl fell the brunt of it. Touche ("too-shay") Barry, well done! Its good to see in the world of corporate greed that D&T is still on 'target' and the powers that be, are keeping it real!

Its getting worse. Comments from readers of a Businessweek article (Sept 4 – ‘Best places to launch a career’): EY just laid off 100+ employees overnight and unexpectedly in their NY FSO Audit practice including many employees who had just begun their careers. EY fired 100 people. Not for non-performance, but perhaps to “lure” fresh grads (cheap labor).

Might as well weigh in. I'm confident that the criteria for termination was based on actual skills, perception of skills and alignment of skills to the backlog in the business. No doubt all sorts of people were terminated; white, black, asian, women who are pregnant, men with spouses that are pregnant, disabled people, tall people, short people, and people with work permits. With respect to whether or not there will be more is directly dependent on variability from the assumed going forward attrition rate of people and the ability to secure expected future business. In the Big 4 audit world, recurring work can be as low as 40% of so of annual revenues, which means each year the Firms have to go get business to make the expected revenue numbers. And, since people are the ones who service the revenue, to the extent the revenues don't get realized, people get terminated. Usually, if the shortfall of revenue is minimal, or temporary, then the headcount is maintained, and adjusted going forward by reducing new hires or encouraging certain marginal performers to leave. These terminations indicate the revenue shortfall is large and recovery in the near-term is not possible. This is just math. Of course, the issue is why were the planned revenues so high relative to today's realities. Probably due to a top-down cram down of the revenue plan to the local offices, and over the last few months the local offices have reported consistently poor numbers relative to plan, and the future looks as bad or worse. This has happened in the auto industry and the A&D industry many times over the last 10 years or so. The people that claim the firms are horrible (or a "cesspit") should have then quit such firms before they were terminated. No one in this country is forced to be employed with the Big 4, so my advice is to talk with your feet rather than cry about how bad it is in this blog. Perhaps such people should go watch the 1992 'Glengarry Glen Ross' movie. Alec Baldwin has a great scene where he discusses his "ABC" and "AIDA" concepts. Here is the link: http://www.youtube.com/watch?v=TROhlThs9qY

Haha, yes of course it was performance related, it was logical, hence the reason people with strong perfomance ratings(2’s), fully utilized, as well as managers, senior managers and directors were released…sounds like ur drunk on the kool-aid my friend…brown-nosing on the blog would be more beneficial when u don’t hide behind an alias…

Looks like the whoever posted the Barry comments have caused the Deloitte kool-aid drinkers to start posting on this blog. Love the reference to EY to divert attention. EY is too smart to lay off pregnant women. Focus on the HB’s instead and make them leave the country quickly.

The one’s who make the decision to make the cuts are not the one’s who actually communicate the cuts (aka, the people who do the dirty work). The partners who reassure the staff that there will be no cuts are told themselves that there will be no cuts. Think of a puppeteer and its puppets. The puppets are well compensated, but they are scapegoats too. The one’s truly at fault for the mismanagements can never be touched. Bad publicity, however, hits everyone’s pocket book.

Does anyone know what’s going on with Deloitte Consulting? On Aug 29, I was told that I would be offered an ERP consultant position early the following week. On Sept 5, I was told that they’d get back to me but not to worry. Obviously, there’s an issue here.

Hey guess what – Welcome to the real world people. Lay-offs happen. Nobody likes them, management, folks left behind and folks let go. D&T hung on for a long time to folks, more than other firms did. Maybe folks should take some responsibility for themselves and their careers and think about (1) what client industries they serve and (2) improving their performance.

Guess what Gen Y, your days of having things handed to you because of a good economy and your generation being smaller than predecessor generations is OVER. Get out there and work hard for what you want, and it won't get taken from you next time.

Things handed to us?!? Working at Deloitte means working nights and weekends. When not “working,” forced to participate in recruiting events and other client functions during our personal time. Whatever it takes to get the job done. Giving up our personal lives and in some cases, getting divorced because you are forced to work so hard. All so that jerks (partners) like you can leave at 6:00 pm and collect the big draws (paychecks) that you do. You get real!

I was from the New York WFC office and I was laid off today at 10:am. I received an email Friday to meet with an HR and a partner to discuss my 09 Schedule. From the time I received the e-mail I already knew that I was laid of. However, something I noticed last week was that all the people who where getting laid off were either – African Americans, Hispanics and people on H1B. Maybe WSJ should investigate this more in deep.

This is about partner greed – plain and simple. As Deloitte is downsizing in the U.S., they are ramping up operations in India, where labor cost is lower – now one of the largest offices within Deloitte. Partners are lining their own pockets – as if they are not making enough already!

For the rude person who is saying above “Welcome to the real world” and “Maybe folks should take some responsibility for themselves and their careers and think about (1) what client industries they serve and (2) improving their performance.”… Let me tell you that the last round of layoffs was for people who all had good performance ratings and all of them are hard workers. You also don’t get to pick what you work on all the time at Deloitte and it is very disrespecful to suggest that we did not work on the right jobs because when the firm was making money from our jobs, no one advised us to do otherwise. I personally asked for other jobs and never got them. Just remember that a lot of competent, honest, and hard working people got let go this year. My advice to those who are still there is not to make fun or gloat over our misfortune… It can happen to you too no matter how good you think you are…and even if you are in high positions…

“Guess what Gen Y, your days of having things handed to you because of a good economy and your generation being smaller than predecessor generations is OVER.” – – sounds like a bitter old-timer that thinks back in the day when his/her generation was pushing the green-bars around the audit room that they worked harder than the current generation. Get real pal – the people performing the “real work” within the firm have it much worse in the post-Enron/post-sox world – the staff are working their tails off, making a small fraction of the $7-800 thousand draws that the fat cats are making.

Deloitte seems to be notorious for hiring diverse candidates, and when challenges appear, whether it be language issues or otherwise, the diverse candidates are quickly pushed out the door – deemed to be “performance issues.” Either fully commit to hiring diverse candidates or pull down the facade – claiming that Deloitte is the diverse firm of choice is a joke!

I got laid off in Feb. 2008 from Deloitte. Yes it was a shocker to say the least but I ma over that now because I always believe that when one door closes God opens another one! I was on an L1 visa too but good thing was that my hubby’s job provided the back up for me.

I got laid off in June from the NY WC office. I was a top performer who got a very good raise last year, but I am black and was on a visa so I was the first one to go.I had to pack up and leave the country, lost my security deposit, had to dump all my furniture and other stuff as I had no time to sell anything. It cost me financially and after working 3 years, I got 4 weeks serverance which after taxes was 2000 dollars.I was heavily recruited by Deloitte from college and even went back to my country where there “came and got me”. I am so over Deloitte and all it stands for.

In other mob-organisations you get shot when leaving the firm so in comparison let's first appreciate that this didnt happen…

I worked for D&T for several years and although it constituted valuable work experience, im very content to have swithed to a financial audit function within government, which I'll recommend to anyone interested in adequate budgetting for the work to be deliverd and a fair balance between work/personal time.

Strength to those with new challenges and remember that you always have the power to choose.

It's easy to piggy back to fame using people's misfortunes and to inflame passion when tempers are already running high!

Has the writer bothered to even" investigate" if Deloitte is providing any kind of assistance to those that are laid-off? I am sure not as no mention of any such information is made.

Let me tell you the firm is leaving no stone unturned to provide assistance to these colleagues of ours in finding alternate employemnt. It depends on the individuals to make use of these opportunities.

Yes, I agree it's painful to get "laid off" but if the firm was one of rogues and rascals, how come many of them stuck around for the number of years they mentioned? Why did they not find a clean organistion? Fact is no matter if it's a Deloitte a J & J or a P&G- if anyone of us needs to get benched-they will go right ahead and for those of you wearing rose-tinted glasses and think only the Big4 are demons..get real it's time you get to know what's happening outside our country.

I know of quite a few case where the so called money making partenrs have stepped in and assisted individuals famalies of those suffering from terminal illness and other such issues. They do it whole-heartdly without making a song and dance. Just becasue everyone is not aware of evrything that goes on in the firm, it's not right to join the bandwagon and piant everyone with the same brush and no I am not part of the fan club of any of the partners…just someone who wishes to get the facts rights!

Let's learn to pick the pieces of our lives and move on instead of mud slinging and name calling.

To answer the lovely Deloitte partner above who thinks the revealed truth will bring bad press to their so perfect organization, I was laid of 5 months after getting recruited from college. You don't even have time to get to know a firm in 5 months, let alone thinking about switching to J&J or P&G. Maybe you guys need to stop the "Best place to launch a career" propaganda so that people can think about switching after their first day, if not before.

Hey Deloitte how about a little compassion. A good company would do the following:

1. Give a ‘heads up’ to the employees that things are not going well. Cuts are coming.2. Offer incetives to get people to leave on their own (severence package, pay for school?)3. If further cuts are needed after the voluntary cuts, let employees know that it is coming.

My wife recently got laid off…she was in her 31st week of pregnancy. But we will survive because we have enough savings. She still possesses very marketable skills, but her pregnancy might impact her ability to land another job. I kinda agree with both sides….Deloitte did lay-off my wife when she was rated a 2 throughout her career with deloitte. she was being told by partners from this office and other offices that how she is thought to be partner material. Her clients were very happy, she was not terribly under-utilized, and was not only doing her job, but doing a lot of other things that were not required of her…organizing alliances with her ex employers, women’s initiative leadership, recruiting….she did work nights, weekends and whenever the company called upon her. She has been talking to partners from other regions in trying to get her utilization up. Inspite of all this she walks into work a few months back and gets laid off. No one seems to know why!!! The partners from her office and other offices are now calling her, helping her, wanting to talk to her….and they say that no one knew that this was coming. So, I think someone way up there…in his/her plush office…decided to pull the plug, without realizing how inefficient their method of figuring out who to lay-off was. I have a feeling they had a tool that cranked up a list based on utilization, region etc. But I have a feeling that some people were protected through this round of lay-offs. People who were rated 3, were underutilized, but still managed to survive…..in offices were partners were a bit more active in managing…..

We actually liked the firm…but it was quite brutal when it came to laying-off….but then they are offering decent lay-off packages etc….If only they handled this well. Maybe someone who was responsible for this project, should also be laid-off???? for doing such a poor job.

If you are in a smaller office, you are rated 3, are a first year manager, with many others managers or senior managers in the same office, are <85% utilized…..run now!!!!! this is for the person from hawaii or any other smaller region/office.

Funny, Business Week ranked Deloitte as the #2 (2008) and #1 (2007) best place to launch a career. Just in time for recruiting season. Maybe Deloitte got downgraded to a #2 (from #1) because of the layoffs and other tricks they pull – LOL. Yes, I also heard a number of people were laid off in FAS recently. Tax is next, but not before the end of busy season. Partner’s got to milk you before they “separate” you from the firm. As for the pregnant woman that Deloitte is all of the sudden helping (happy to hear this), maybe Deloitte read this blog and ran a spreadsheet pulling up the pregnant people and are seeking them out to remedy the bad press. Perhaps this blog is the reason that more partners are trying to appear helpful — not to say that there weren’t a few (and I don’t mean many) decent partners who genuinely tried to help.

By Mid America, do you mean Texas, Missouri, or Colorado? Francine, maybe you can ask the person in charge of Deloitte’s Mid American region why the employees get cut when the bosses can’t deliver their numbers?

As a 24 year veteran of the CPA world, I feel your pain. I too was let go from a firm I committed 7 long years of no OT pay ever, and harsh conditions, and long working hours shortly after the birth of my son. I was told it was due to “lack of work” however they had already hired my replacement. It’s a heartless business.

Just one more point I want to make. If you are not US citizen your benefits end on the day they took your laptop away. It means that you don’t have insurance, etc. They pay you lump sum and you are out.

Deloitte FAS in New York laid off about 15 percent of their staff on Wednesday last week (at least 30 on Wednesday, more on Thursday apparently). I heard that more was on the way on Thursday 9/11 – great time to do it on the anniversary of the attacks while they work across the street from ground zero.

None of the people laid off were treated with any amount of class or respect. The FAS staff had been continually told by the NE leaders, Nick Florio and David Williams, that there would be no layoffs. In fact, they got angry at even the suggestion. We were told that costs would be cut in other ways, such as travel, yet, all new hires from FAS, from Mexico City to Toronto were sent on a training course to Greenwich, CT early last month, staying at a Hyatt with all the perks. There must have been a cheaper way to get this training in that could have saved some jobs.

Last week, the people who were targeted were the previous new hires from last year. The people who were targeted were sometimes slightly more experienced for their level and earning more money for their level, and because of this had earned (accumulated) hardly any severance. But, some people were relatively inexperienced and young from college – but the common factor is that they were all hired in the 2007 fiscal year and were let go because they hadn’t accumulated much severance. They did not want the bad PR of reneging on the offers that they made to college kids last year, so they went to the next in line. Almost all of the people laid off were from the previous recruiting class – so, they didn’t want to renege on their offers to their recruits but did so to the people who had already been trained – all of which had good performance reviews, that I met. The poor performers were laid off very quietly in June. At least they were honest in saying that the current layoffs were not performance related.

But what is wrong with the people at the top? Last month, they hired 30 new people – most of whom had no experience and let go almost everyone that they had trained over the last 15 months? Is this business efficiency? What good will they to bring in as the busy season approaches? Instead of talking about his jogs in central park during his weekly phone message update, maybe Florio should have been talking about this so people had some warning and could have revamped their resumes before the great ambush occurred.

One of the people I knew that was laid off worked last winter until 3am every night for a 3 week period. He usually left everynight around 1am otherwise. He had two graduate degrees from ivy league schools and was very knowledgable in his job. Did he deserve it?

I know someone else who was from outside the US, worked extremely hard, had great reviews for his level, but was older for his level, highly paid for his level, and there only long enough to earn a little bit of severance. Unfortunately, HR people may scrutinize his resume when looking for another job since he didn’t get to work there for “two years.”

They told them all coldly to be out before the end of the day, earlier if possible, and get us your laptop. Their concern for PR meant that they didn’t want them to bring down the morale of current employees or take any company secrets. Plus, you won’t get your full severance unless you sign a waiver. So much for Deloitte being one of the best places to start a career? The people who came when it was ranked #1 are almost all laid off. Also, they should stop saying that they look at their people as “investments” because this proves that they don’t.

I’ll tell you the people who should have been laid off are these useless people from HR who are omnipresent around the firm – they are everywhere and contribute very little to the firm other than screening resumes with an overly scrutinized eye(even though they shouldn’t be qualified to judge), making sure complaince is attained with training, and weilding the ax when people get laid off – for these small tasks why are they EVERYWHERE within the firm). They got angry at people who got upset after being laid off and treated them like criminals – rushing them out the door ASAP – their purpose should be re-assessed! An office assistant could do the same work much cheaper. How do they feel about what they do to justify their existance?

Do not trust this firm. They reneged on their commitment to their new people from 07 regardless of performance.

Some have a feeling more layoffs are coming down the pipe. Those with good ears and connections are already looking for and / or have found new jobs.

All these laid off people will find jobs in industry (or elsewhere). They will remember what Deloitte did to them. They should tell their current employer to not use Deloitte. As they progress in their careers and become leaders, they should continue to remember what Deloitte did to them. It was stupid of Deloitte to ruin their reputation just so that the firm management and older partners can maintain their comp and cash out. Stupid Deloitte is just shooting itself in the foot. When firm management retires, the young partners will be left to deal with the mistakes of the retired, but rich partners.

I was the first person to post a comment about being 29 weeks pregnant and let go. To those who say they feel no more sympathy for those pregnant or on visas…the difference is that I don’t have the luxury of looking for another job right now. I have been squarely told my headhunters not to even bother looking until after I have the baby. I was supposed to work for 7 more weeks before starting short-term disability of which I now receive nothing. In response to some other comments, yes I signed the general release because 1) I can’t afford NOT to get the 4 weeks severance that came along with it 2) My husband still works at the firm and it wouldn’t really be the greatest career move for his wife to sue 3) I’m quite sure Deloitte did their legal homework and I wouldn’t have a chance. According to FMLA – there is no protection from layoffs due to econcomic causes.

There seems to be no rhyme or reason to who was layed off in my office. On several of my jobs, I (the manager) and my senior were let go. We had 3 women due within 2 weeks of each other in my office and at least 2-3 others already out on maternity leave. I believe I’m the only one of the bunch to be laid off, so I’m not naive to think that’s the reason or they’re out to get the pregnant people…my biggest frustration is that I’ve been incredibly active in recruiting and in my opinion used as a bit of a poster child as both I and my husband worked at the firm, I had been successfully working on a reduced schedule for 3 years, was having my second child and planning to come back. Ironic that only 2 weeks after the wrap of the summer recruiting programs that I was let go.

From what we can ascertain, it seems like the partners had about 1 day to decide who to let go. We also have no idea who actually made the decisions. Everything was left in ridiculous state of disorganization. They didn’t even want to take the time for me to tell them who needed to get what binders from me and who to send my files for..just that my partners would handle it..which is like a bad joke!!! Basically, when someone realizes they need something I had..they have to hunt it down and if they don’t ask..well, so much for firm archival rules.

To top it off, I STILL haven’t been paid out for my accrued PTO, which I was supposed to receive 2 weeks ago..I can’t get access to paystubs for my severance or for before leaving (we only received them electronically)…I was given the name of someone to contact…who apparently is no longer with the firm and have been getting no recent responses from my “HR contact”. Everyone is passing responsibility to someone else and noone will actually get it straightened out!

Should I be posting from a Deloitte laptop? Anyone hear anything about layoffs with Deloitte Consulting? Our utilization is pathetic so I can’t imagine it is too far out. These posts confirm my suspicion that the firm is not a loyal/committed to its people as they say … meaning, it’s just a job. Work no harder than you feel you are compensated for so if you are laid off you can walk away with no regrets and no hurt feelings. …my attitude may change for the worse if I am laid off.

I am the eternal skeptic, I don’t believe anything I read on the internet, so I wasn’t entirely convinced that this was more than a blog of bitter poor performers … BUT, there are an awful lot of posts AND there is nothing on DeloitteNet to calm any concerns of those still employed.For a company so willing to share good information there sure isn’t anything on the bad.

@Anonymous 1:34:00 Thanks I think. If your in the business, I encourage you to read more. “The blog” is more than Deloitte, although I am happy to provide a forum for professionals to share information not hosted anywhere else. As opposed to other forums, I have professionals of all levels contributing and there is a real voice behind the blog, mine and mine alone.

I have received very positive feedback, including from high level Deloitte executives, that airing concerns helps and has informed future decisions. That is very gratifying and hopefully good in the long run all around.

to all who lost their jobs, I honestly feel your pain. I was laid off from PwC in Feb after 8 years.

The upside is life has never been better for me since, so yes I fell victim to a sense of misguided loyalty to the firm.

When I’d started, EVERYONE knew how the relationship worked. You use the firm (to get your Chartered Accountant qualification), they use you (cheap labour).

I just managed to use them more, got my greencard and a good severance package.

Again I’m not bitter at the firm for the layoffs, that’s part of life, what I am bitter about is HOW they did it, and why the ‘coaching’ partner and my direct partner weren’t the one’s to let me go, instead some other partner I never met was given the dirty job. And performance didn’t even factor into it. A friend of mine had 95%+ utilisation as a manager, and still got laid off.

To all the foreigners who got screwed over, I feel your plight. The immigration rules are a bit illogical here sometimes. On the other hand we, as foreigners are guests in this country and have no ‘rights’ to stay or work here (it is a ‘privilege’ not a ‘right’). Yes H1B (and arguably L1) visa’s are effectively ‘insourced-outsourcing’, but it takes two to tango, you had to decide whether to come here and take that risk in the first place. Sometimes those risks don’t work out.

With the national debt at $10 TRILLION and the nationalisation of AIG, Fannie Mae, Freddie Mac, Bear Sterns etc. it’s probably not the worst thing to have to leave the US right now.

I am a manager with Deloitte who got laid off too. I had two 2’s and two 3’s this year in my eval so I was definitely not a bad performer. I got a call one day telling that it was over. The partner on my main job did not have even the decency to call me. I worked for this guy for years and thought we were in good terms. I was not bitter about the layoff to be honest but I sure was irrate about the firm being in a hurry to get our laptops and disconnect our email and voicemail as we were some kind of thiefs. They trusted me with very sensitive info for years and they could not trust me with my laptop or email address for a few days… If any partners are reading this, just know that people want to be treated with respect and dignity. The way these layoffs were done did not have either. I also heard again and again that no more layoffs were expected until one day I got cut. Had I known, I would have left on my own terms. Big four firms should consider counseling people out instead of laying off in numbers. They will save money on their side and save their relationship with us and dignity on the other.

My pregnant wife had a few interviews and when they see she is pregnant she does not get a call back….who would want to hire a 32 week pregnant woman??

Also, after she signed the waiver, no more partners calling and being nice…..well, at least we know everyone for themselves…..and another thing that we know….there will be no more deloitte in my workplace…I am no 2 in my IT department reporting to a CIO…and no more Deloitte services would be needed in my wife’s future workplace either…that we will see to..

In several offices, partners are not even telling their staff that the managers on their jobs got laid off. Instead, the staff are finding out by either (1) admins gossiping or (2) emails suddenly being “returned to sender”.

In two cases that I’m aware of, when the partner was finally approached about it, her response was, “Oh, it was her [the manager’s] responsibility to let everyone know.”

There’s always been a hush-hush culture in terms of who leaves, at least from my time there. I was a manager, and was given a few days to wrap up and transition…so I did indeed let all my staff, counselees and clients know…basic professional courtesy…if some offices let managers go without at least a few days to do that, then I completely agree with the prior poster. Sounds like it did happen in some cases, based on other posters’ responses – very unfortunate and unprofessional if that was the case.

That’s hilarious…the manager’s responsibility…beings that we were immediately cutoff from all communication and not even allowed to send our files back to other people on the job. I personally, am really curious about how the conversations with my clients went. 1) My clients love me, 2)On some they lost both me (manager) AND the senior and were left with noone else to finish up.

These comments tie in so well to Francine’s Deloitte Double Talk blog. Deloitte must train its leadership on effective double talking, while exuding eminence. Ha! Perhaps the answer is to not sign the waiver, if you can afford it. For those who signed the waiver, what exactly are you agreeing to? Are you waiving your right to sue the firm? Could one argue that the waivers are signed under duress, given the element of surprise (the firing) and limited time available to sign the waivers? I would have assumed that the preggo’s would have a great case against Deloitte.

Someone once said to me that the Big 4 conjures up all sorts of documents that they make their employees sign which are not legally binding, but rather, are intended to scare the employee into submission. Case in point, the noncompete agreement. Perhaps there are parts of the waiver that are nonbinding as well.

If Deloitte lays you off, and you find a job with another Big 4, are you still subject to your noncompete?

The reason that Deloitte siezes your laptop/computer is to prevent access to info that may be of benefit in your next job and to prevent you from sending any e-mails to their current employees or clients that may tarnish their eminent reputation. Solution is to download your complete contact list today and send out the notes that you want from your own computer when they ask you to leave. Plus, treating you like a thief is part of their shame you into silence practice. What do you have to be ashamed about? You aren’t the reason that the firm keeps losing business.

If I were a Deloitte partner in a leadership role reading these posts, I would suggest to my partners that we ship more jobs to India, where people are happy to be paid a fraction of U.S. salaries to work double the amount of time without compliant. Oh wait, Deloitte is already doing this. In fact, I believe that they claim that they are miles ahead of the other Big 4 firms. In fact, the unfinished jobs of the terminated employees can easily be completed by Deloitte’s India staff at more profitable levels. Deloitte. Green Dot. Eminence. Don’t you see it?

On the contrary, Deloitte is hiring in India. @12.35 pm, Deloitte is just laying off the people in the U.S. who flew to India to teach you how to do your job. As for the U.S. personnel still on rotation in India to manage you and your team, why don’t you tell them how you think in a few months you’ll be able to do their job better than them, at a fraction of the cost.

I TOO GOT LAID OFF THE OTHER DAY. WHEN I ASKED WHAT I HAD DONE WRONG BECAUSE MY GPS SCORES WERE PRETTY GOOD AND I DID GREAT JOB. THEY TURN AROUND AND TELL ME THAT THEY USED OTHER CRITERIAS THAT THEY COULD NOT DISCUSS OR GET INTO. NOT DISCUSS? IT WAS MY LIFE THEY WERE SCREWING AND THEY HAD NO GOOD REASON. WISH THEY HAD EVEN SAID THAT THEY HAD USED THERE BELOVED ACL TO JUST PICK PEOPLE AT RANDOM. NOW I AM THINKING IT WAS BECAUSE I WAS BLACK. “THANKS DELOITTE AND PROMOTING YOUR STUPID DIVERSITY THINK”. WORST THINK WAS WHEN THEY ESCORT YOU OUT OF THE BUILDING LIKE YOU ARE CRIMINAL. YOU JUST HAD BEEN WORKING THERE! AND THEY MAKE YOU FEEL THIS GOOD. WHAT A COMPANY! GOODLUCK TO THE REMAINING PEOPLE.

To the person above, please tell them you want to see your employee file. Legally, they have to let you see it. If nothing else, it will force HR to look through your file before letting you review it. Please take notes on everything in the file. You are allowed to photocopy anything that was signed by you. Anything else, take notes on the dates and subject matter. Make these people accountable for what they did. They can be very sloppy. If you are a minority, you may have a case. One can assume, if they did not let you go for a good reason, then it must have been a bad reason.

In Philadelphia, only a handful of managers were laid off…if was predominantly seniors and staff (and seems like a lot of seniors about to be promoted to manager).

About the comment of the preggos having a case…I looked up FMLA the morning that I suspected what my “scheduling” meeting was about and found that there is no FMLA protection for layoffs…only if your can prove that you were fired specifically for being pregnant. With plenty of pregnant people in my office NOT let go, it would be hard to prove that point.

To the AERS India employee above, yes you work for nothing, but NO you cannot do my job. You can’t do it because Deloitte is not telling our clients that you are doing the audit work and therefore, you cannot interface with the client, which is the most difficult and important part of my job. From what we’ve experienced in my office, mostly meaningless, repetitive tasks are sent to India and those tasks have to be re-done by our professionals in the US once the final product has been sent back. So, not only is the firm hiding you from the companies we audit because they do not think you have the skills to interact with the client, but the work you are doing isn’t even up to our standards.

I totally agree with the message above. We were told to use Region 10 to cut down on our budget but all it caused was more work on our end. It was a mess. Region 10 never understood what to do and when we would receive back their work it was all messed up and the documentation didn’t even make sense. All it caused was more work on our end and pretty much redoing their work. They also never understood deadlines nor respond to emails or phone calls. On the majority of my engagements we were always waiting on Region 10 to provide their work before we could issue.

I am curious to know since Deloitte is laying people off and they seem to be losing clients if they are still going to invest $300 million in Deloitte University???

can somebody please share their thoughts on what actions people on H1 visas can take after being layed off?

im an analyst in consulting from chicago office and heard today that 15 people in lawson practice were layed off. im counting my days and want to be prepared to make the most of my 30 days before having to leave the country. Can someone also please suggest any ‘desi’ consulting companies that could file for an H1 transfer for people like me?

Region 10 does need major improvement. However, the firm forces its practice to send work to region 10. Partners compensation are impacted by the amount of work they send to region 10. In fact, in one meeting, senior leadership actually said that someone could not make partner without doing a rotation in region 10. It is basically being forced down everyone’s throats. Why is utilization down in the United States? Because they keep outsourcing the work to region 10. Then, they make the staff feel like losers due to low chargeability so the staff will leave on their own. If partners are suppose to bring in work, why are the staff losers?

Yep..it is really weird that Deloitte did not communicate the layoffs to their clients. A lot of my wife’s clients are now calling/emailing her to figure out what is going on and why she is not on their project anymore. She was a very well respected [and this is not just me saying because I am biased]. It is really funny that recruiters call my wife and tell her that some of her recent clients have recommended her to them. It is really crazy that deloitte lets go of exceptional people. It is really about bottom line and partner salary. But then is that not how it is in every business?? As for region 10 getting more work – it is inevitable….if US plans on doing business globally, then people in the US will have to come to terms with competition from outside. Afterall it is all about bottom line. But I do agree that work coming from India is not of a quality that can be presented to the client. India is still 10 years away from starting to produce quality work.

i just found this blog and wanted to share my story. I worked in the Dallas office and was laid off on 9/2. I was 13 weeks pregnant at the time (currently 16 weeks). i was also a 2 or 3 rater performer and was managing engagements far before my time.

i was told that the lay off was due to “economic situations” and was even advised to pick myself up a copy of “what color is your parachute” by the partner that delivered the news in order to help me deal.

lay offs in the dallas office have spanned through both AERS and ERS. i’m not sure if anyone in services or tax has been effected. layoffs in the dallas office were across all levels from first year to senior manager. there seemed to by no rhyme or reason for who was picked.

i consulted a lawyer about the letter that i was required to sign to extend my severance from 4 weeks to 10 weeks. originally i was offered a 2 week extension (to make a total package of 6 weeks), but i was given a 6 week extension (to make a total package of 10 weeks) because i am pregnant. Deloitte covered their ass in ever way possible to prevent being sued because of the economic layoff situation. in addition, they are not required to give the notification regarding layoffs according to law, because they are not laying off more than the required percentage amount of employees firm wide. there was nothing i could do but take my 10 weeks and look for another job. thankfully at this point i’m not showing.

i feel so deceptive looking for another job knowing that i am 4 months pregnant, but at the same time, i feel like companies can be so deceptive when they perform a layoff after stating several times that no layoffs will occur. i guess that’s the way of the corporate machine.

i started with deloitte out of college, knowing that they were recognized in respect to diversity and minorities. i feel like the economic situation and the propaganda pumped by deloitte has changed my outlook on corporate america. i will never again pour as much energy and effort into working 16 hour days, traveling to small town america, or commuting over and hour each way to client sites. there were days that i would leave the client sight at 3am only to be back at work at 8am in order to complete an audit. i’ve worked 7 days a week for close to a month during busy season.

through all of this, i have learned that i will never again put myself or my family on the back burner to work for a firm, especially one that lies to it’s employees and then lays them off with no warning. it’s not worth it.

like several have mentioned, i feel sorry for those individuals who are left. their work this busy season is going to be completely out of control, and in may ways, the firm is setting itself up for failure. moral is low, and individuals will be overworked more than they already are. how can you under those circumstances provide a “client experience”? you can’t.

If you count the number of audits that Deloitte has lost due to the current financial crisis, it is no wonder that they are laying off. However, to be clear, Deloitte is not laying off simply due to the economic slow down, Deloitte is laying off due to the failures of the clients they audit. Someone should teach Deloitte the meaning of the words “going concern.” Perhaps Deloitte should “right size” their headcount by getting rid of the loser partners responsible for the failed audits. In light of the current economy, no one should surprised if Deloitte attempts to “right size” its headcount again.

US CEO Barry Salzberg sent out an e-mail on September 22 informing all US employees that there will be a “headcount realignment” due to the current economic crisis and that “some people will be leaving us.” (even though they have already performed a substantial “headcount realignment”)

I think everyone on this blog knows that Barry didn’t send this e-mail out of the kindness of his heart to give his people a “heads up” about the “headcount” issue.

In my mind, this e-mail was sent out to comply with WARN Act requirements, which mandate that if you plan to layoff more than 30% of your employees, 60 day notice must be given. So, yes, more layoffs are going down. Since they are complying with WARN, this layoff could be much larger – possibly massive. In my mind, the next round of layoffs will be like looking at casualty levels in World War I compared to WWII. Image-conscious Deloitte wouldn’t have made such an announcement unless they planned to cut many, many more people and stay in compliance with WARN.

Merck sent out a similar letter last year, and lo and behold, 60 days later, a massacre occurred – massive layoffs were conducted.

Keep in mind that the latest cuts were not performance based – they were based on salaries and accumulated severance. Who knows what the criteria will be next time (late November – just in time for Thanksgiving!), but I trust the criteria will be similar.

So, if you get an e-mail that says “FYO9 Planning” – run the other way and don’t look back! Some useless person from HR will give you the bad news to justify their existence.

wow – it’s really suprising to me just how many pregnant people were laid off..wondering if it’s just a coincidence if we all found this site or what…I mentioned before that I think I’m the only pregnant person from my office laid off among many others who are pregnant or on maternity leave…interesting that the other poster got 6 weeks instead of 4 for being pregnant and signing the waiver. I had assumed all the offices did the same thing. I got standard 2 weeks, 2 weeks for every year employed, plus 4 weeks for signing the waiver. As for the justification of last waive being salary and accumulated time…I don’t think that was the case everywhere…I had more accumulated time than most people my level and was on a reduced workload..therefore, lower salary – but still working my butt off…

I do not think there is a “standard” severence calculation for everyone. I got 5 weeks plus the 4 weeks for signing the waiver, total of 9 weeks. If I used a “standard” calculation of 2 weeks for each year it would have been 12 weeks total. I assume since salary is based on regional economics and each office is different that severance would also be different in all offices.

@1:47:00 I think it’s ridiculous, unjust and potentially illegal (and actionable) that severance was discretionary by office. Who’s to say that someone got less severance for the wrong reasons? In a general reduction like this, local partners should not be able to cut special deals or do more or less because of local economics. That’s what’s so wrong with the model.

If I get laid off, I will not sign the waiver just so that I can find others like me and sue the pants off Deloitte. I do not need to win the case or even collect a dime. The negative advertisement to Deloitte will be satisfaction enough for me. It is time that all these FATCATS pay for their actions.

A lot of opinions:Deloitte is still one of the best places to START a career – even after all this. The ranking says nothing about STAYING. I have met some industry accountants (even CFOs) none of whom could make a solid argument against the perception that someone from big four can come and be their boss. Unfortunately, working for big four firms still means a lot on paper.Like the risk taken by foreigners (visas) when they come here, working long hours at a Big 4 firm can pay off in high-paid manager, senior manager, partner or even industry positions, but it might not. There is a risk there – especially related to the accounting firm itself. People need to think about what they want; many accounting students flock to Big 4 because it is “cool” and do not quite understand that they will give up a lot when there. For example, with the 150 hour requirement in most states, most students have Masters Degrees and can earn substantially more in industry, finance etc – but a lot of students look down on that path. My conclusion from reading comments on this blog as a whole is that by the time they realize how much they dislike the big four, they may have given up a lot!There are a few things that we must all understand due to the unique business model of big four firms. Accounting firms and law firms will be more likely to make quick massive lay-offs than regular companies. When you don’t “make something”, your “costs” are people. Yes, they look at us as investments but only if our status as expenses isn’t the flavor of the month; when you lose multi-million dollar clients, your employees become expenses. This particular thing does not only apply to big four – it applies to any company that makes large amounts of money from a small number of customers. If you lose one customer, you might have to cut 100 workers.There’s a book called “Career Warfare” written by David D’Alessandro (google it); he says that law firms and accounting firms are probably the longest hazing known to man….long hours etc. D’Alessandro also pointed out that long-term employees in such firms who do not make partner will eventually be fired because someone else can do their job at a lower salary. I have noticed that several people here are shocked that high-performers are let go, but high performers are also highest paid. From the perspective of the firm, if cutting costs means getting rid of anything you can buy for cheaper then high paid employees will come second ONLY to the worst performers. As we all know, the poor performers have been let go already because this has been going on for a while – so I say that if you get paid more than most of your peers because you’re good at your job then you might be at risk. This is especially true if your peers do the work “well enough”. Is it illegal to let someone go because you pay them too much? (someone please check me here)Unlike CEOs (management usually owns much less than 10% of large corporations), the administration of accounting firms own the enterprise and their income is far more directly linked to it therefore they have much faster reaction times. Francine just posted how partner pay is set (a while ago). As employees we ask that these firms behave well and nicely, but if you are a partner at a big four firm you got it because of excessive hours, major sacrifices, and may have been laid off before yourself. How much of your salary would you give up to keep more people on staff? How successful would you be in convincing other partners to do the same?I could go on forever but I want to make this clear. I am not here to defend big four firms or make excuses for them. The purpose of my post is to make clear the fact that there are things inherent in the partnership model and in the industry which make it impossible for firms to be as nice as we would have them be. To all those who won’t accept services from Deloitte in the future – there are only three others, so that might be hard. Also consider how successful you will be with convincing others of your reason 1-10+ years from now without sounding like you’re not letting go of what is “normal” business practice.My advice to those recruiting or starting soon is to SAVE your bonuses in a savings account and keep your resumes fresh; KNOW what you’re getting and what you have to give for it. My advice to everyone else is to figure out how you will survive if you lose your job – if you have a family, the Big four is probably far too unstable an industry for you, unless you are a partner. (my opinion). Please go and buy some involuntary unemployment insurance….someone I know just got some for $50 a month (pays $1000 per month for 3 months)!Peace and love to you all! Thanks for a great blog Francine. (Everyone – please correct my assertions if you know better.)

My manager got laid off a few weeks ago. I thought that he was a very hard worker and he had really messy and difficult jobs and I looked up to him and never thought I could match his skills. I was shocked that he was let go cause everything I know is because of him. I am still disappointed by this but I am also very impressed by the way he handled it. Some of the people that left were pretty solid and smart folks.

I work at Deloitte and have not been busy for a long time. My colleagues have stopped pretending that they are busy, and pretending to be busy is just the type of political posturing that we do. When we are given work, we are asked to charge non-chargeable codes. This means that we work, but do not get utlization credit on paper for our work. Strange thing is that we suddenly started receiving e-mails again about how well our practice is doing. I’ve overheard some of the more senior people talk about “bleeding credits” but am not sure what it means. It just does not make sense that there is so little chargeable work and the practice claims that we are doing better. I suspect that management is playing with our heads again and wish that they would have some integrity and be honest. In any event, I have read enough of these posts to know that it is indeed time to polish my resume and start looking for opportunities elsewhere. It is unsettling to be on the job hunt given the current economic crisis, but it is better than doing nothing and letting someone else control my career path. Good luck to everyone.

But it means essentially that Deloitte has already charged the client for hours that have yet to be worked and charged through to timesheets. They have billed for work in advance, via a retainer or fixed rate contract. They owe the client the hours, but instead are taking this amount into income, hence the emails about practice doing just fine.

What this means is that you will still work on the engagement as long as the work still needs to be done, not get credit for your hours, work overtime, not get paid, and the firm will show a profit for this engagement. Clients may also get cheated out of hours they have already paid for if instead staff is cut and no more work done. I think you get the picture.

Join local accounting/auditing firms. Use your connections [that you created while at deloitte], to take away more business away from deloitte. Even if half of us succeed in this, deloitte will still end up loosing a whole bunch of their clients. I am determined to steal a few of my ex-clients and am working diligently. Payback time!!!!

Just heard from the Strategy & operations Consulting leadership….many heads to roll in consulting. No cutbacks on campus recruiting though. Deloitte is more worried about branding in schools – they would let go of people who can deliver client value.

I am a Master of Accounting student at USC. I have read maybe 1/2 of all the comments here. SCARY STUFF, to say the least. I, with my classmates, are currently going through recruiting. I have a PwC interview tomorrow–this is horrible news to read right before the interview! I hope things get better for all of us. Great site by the way.

Luckily you were not interviewing with D&T san fran office. They decided to email the USC students 3.5 hrs after their pre-interview dinner was supposed to start that they will be unable to make it. Reasoning, to little interst by USC kids in san fran. Great move Deloitte. They are refusing to reimburse the students for their dinner.

[Just heard from the Strategy & operations Consulting leadership….many heads to roll in consulting. No cutbacks on campus recruiting though. Deloitte is more worried about branding in schools – they would let go of people who can deliver client value.]

is there any info on what criteria is being used to layoff people? is there a utilization cutoff?

Just came across this. Looks like the same thing that happened in 2001/2002. A week after 9/11 D&T NY said they were not laying off anyone (after lots of emails every week for years of record growth). By October, the layoffs started. I don't know the numbers but there were at least 4-5 waves, maybe more. I got cut in the 3rd or 4th, but was planning on leaving anyway 2 months later to go overseas, so no big loss (Guess I shouldn't have told in confidence my "trusted" manager about my plans as I didn't want to screw him in the last minute by my leaving – thought we were friends, but I guess business is business). I don't believe anything these firms say. How can record growth = layoffs when all the partners leave in the early afternoon to play golf while the staff (Senior Associates) work 'til 3am to get things done for peanuts of a salary. Obviously, happy to have left the Big 4.

By the way, for accountants, they seem pretty bad when it comes to planning and budgeting. After these massive layoffs in 2001/2002, I heard they were severely shortstaffed for a long time when the economy rebounded (no planning foresight). Guess this makes sense since when trying to determine illiquid securities for reporting purposes, the partners had no clue about valuation techniques (DCF, comparables, etc.). I learned a lot during my time there, especially not to trust an audited financial statement, since so many people at these firms have no clue what is going on.

The same thing happened in Texas in 2001/2002. DT reassured everyone that there would be no layoffs. Soon after, the layoffs came. How did they determine the layoffs? In our case, by the salary. They laid off senior managers. The staff saw what happened to the senior managers and realized that they could not trust the firm. When the economy rebounded, DT has such a lack of talent that it paid $$$ to buy talent. These high $$$ talents better watch their backs. It looks like DT is just perfecting the layoff strategies that it used in 2001/2002.

Besides consulting, cuts also in shared services…the more this prolongs, and is delivered in small cuts, the less respect I have for the firm and the approach being taken – morale is very low in all business lines. Greendotlife.com has tons of posts about the layoffs, particularly consulting-related…one great post talks about how this is going to hurt D&T in the long-term… couldn't agree more…love the folks I work with, but will probably not have any loyalty to the firm as an alum…

As a professional services firm you think they would have better planning skills. Just a suggestion: maybe accounting firms should cut down on massive college recruiting. Yes, this will be sad for students but better to recind an offer than layoff loyal employees who have work tirelessly for that bottom number. Besides we students can’t miss what we never really had.

To the AERS India employee who stated the following “You are right in India we can do the job better than anybody and for fraction of U.S. salaries” on Sat Sep 20, 12:35:00 PM CDT

You are delusional to think that India can do the job better! I worked closely with the individuals that received the end products from India. Do you know that more than half of the work that is received from India has to be reviewed and re-done. In fact, we have a number of Partners that flat out refuse to send work to India because the level of quality is grossly lacking.

We all know that India can do the meaningless, repetitive tasks for a fraction of U.S. salaries. However, when U.S. Professionals have to re-do these very same tasks, that savings is not so fractional after all.

As Deloitte continues its layoffs, it will soon run out of people that can review and re-do the products from India. With this said, Deloitte will get a wake up call….”You get what you pay for!”

Francine, I have a suggestion for a new blog. Perhaps you can solicit feedback on the extent public accounting firms outsource work to India and the quality of the work product (prior to U.S. employee redo). Clients who pay full the public accounting firm rates for U.S employees should know what the public accounting firms are really doing.

I hate to hear of anyone being laid off, I fell victim to that myself earlier this year. Good news is that many other firms would be happy to have you. If you are a Controller/CPA, have Tax and or Audit experience call us — we can help. Cerami Search Group, Dallas Texas, 214-741-4005. nr@ceramisearchgroup.com

I am a recruiter specilazing in Audit & Accounting nationwide. I work with Fortune 500 companies and have some that will transfer H1B-visas. If you were caught in the layoffs or are concerned that you will be, call me: Susan Dial 469-713-3043 susan.dial@msi-intl.com

I am a recruiter specializing in Audit – I work nationwide with Fortune 500 companies – some that will transfer H1B-visas. If you got caught in the lay-offs or are concerned that you are next, call me. Susan Dial 469-713-3043 susan.dial@msi-intl.com

I got “separated” from the firm this part Friday, along with several other people. I actually had a choice of multiple severance packages, including one where I would sign a statement indicating that I had resigned. Since I did not resign, I did not chose that package.

I learned that the firm “separated” several other people in our California and Texas offices. We suspected that it was coming, but never thought they would do this immediately before Christmas. It really hurts us because the last few weeks of the year is not the time to look for a job. Moral is really low in the practice, because of the way it was handled. Hope the 2-3 weeks of salary they saved on me goes towards something really meaningful.

I got laid off on January 14, 2009. I received one email from the secretary from partner in charge of our office as follows: “Please give me a call. I have a quick question.” This was the most disturbing email I have ever received and when I spoke with her she basically made a question saying “Can you come to the office at two to see XXX(Partner’s name) and XXX (HR’s name)?” Then at the end she added another comment “Please bring your laptop.” I don’t want the company to treat its employees at this fashion. I just want them to tell us this straightforward because we already know everything. I hope firm changes its method to deliver this type of cold message to employees who will get laid-off.

Deloitte never seems to change. They pay enormous amounts of money to keep their PR machine running at full steam round the clock. The propoganda they keep trying to feed their professionals is a joke. It is definitely become evident that the only people the Deloitte leadership are fooling is themselves. I can only say to the firm now that your game is up! No longer will the people currently working at the firm or people considering firm employment buy into your fake babble around Deloitte being the best place to work. Fess up, you don’t care about your professionals you care about your unit values. At least other corporations don’t try to hide their concern only for the bottom line. The firm is living a lie and that’s a much worse matter for you than worrying about how many people the public thinks you are laying off. Soon all will know of your lies. You won’t be able to hide behind your bogus “Best Company” awards and most recent PR wins!

I havn’t heard about the planning of more layoffs. Wouldn’t surprise me though. I have heard that Deloitte is currently in the process of getting rid of 1,500 partners. I know of one that was demoted to director. So much for giving your life to the firm only to have the rug pulled out from under you. Good luck to all the senior managers thinking they will make partner anytime soon. At Deloitte its just not going to happen. Future not to bright for professionals at the firm that cites it’s “the best place to work”. Yeah right!

I can confirm that Deloitte will have another round of layoffs in the next few weeks in audit, tax, etc. It has been discussed and confirmed in numerous partner meetings. Beware of the noose around your neck that you will have to bare in order to receive their severance packages. There will be many duress sessions of “sign now” or forgo your severance package. Legal? Deloitte is a clever PR machine. Just don’t look under the hood … worst place I have ever worked

How is this for PR? I witnessed a senior Deloitte tax partner deny any layoffs in tax. Instead, any cuts were characterized as performance issues. Funny how the people that were separated never knew that they were underperforming. Even with the cost cut measures, $$$ being spent to pay employment law firms to “protect” the firm’s interest (aka, partners’ unit value). Watch your back and don’t believe anything you are told!

Recruiters should focus on people at this firm. Its been dying to layoff more since sept, but has held off due to all the negative publicity. Get ready to see deep cuts at the senior level to minimize cuts at the newbie level. Cutting a senior person with real experience may save 1-4 newbies. Interestingly, they are still active in college recruiting, unlike other firms. PR is important to them.

DT-Tax laying off soon. Some suspect that it will be on the following schedule …

1. End of Feb – after YE provision review2. After April 15th – after the corporate March 15th and individual and partnership April 15th deadlines3. After May 31 – their fiscal YE4. After September 15th (or maybe postponed until October 15th) — after the extended corporate, individual, and partnership tax filings5. In December

The other firms could follow a similar time table. If you are on an engagement and not sure what will follow, consider looking for a job now. Remember taxes will never go away and great talent will always be in demand. The Big 4 panics b/c your salaries impact their partner unit payouts. If they lay you off, smile. It will cost them a lot more to hire you (or someone like you) back in the future.

Taxtalent.com career forum contains a post, suggesting that Deloitte laid off 1/3 of its international tax practice in Southern California, with the most casualties in LA. Some are suggesting that the NY and Miami offices were hit hard. It seems to have led other posters to the conclusion that international tax work is non-existent. We should consider the reason why Deloitte’s international tax practice was hit hard.

Unlike the other Big 4 firms, Deloitte has retained its consulting arm. Both the audit and consulting arm are sucking wind, dragging down the rest of the practice. Greendot.com has 85 plus pages of comments about how the Deloitte audit and consulting layoffs were handled — deceptively tricking people into partners office and seizing computers from people.

Thus, Deloitte’s tax group, despite still being more profitable than the previous year, is facing pressures to reduce headcount. Deloitte’s international tax practice consists of the old Arthur Anderson group, which melted down due to the Enron problems. After the AA group joined Deloitte in 2001, they forced out the existing Deloitte international tax partners and took charge of the worldwide international tax practice. Because international tax was so profitable the past few years, the arrogant AA partners did whatever they wanted and really offended the partners in the other organizations. Now, it is the rest of Deloitte’s turn to make these former AA partners pay, by forcing them to reduce headcount first.

Certain cities are hit harder than others, depending on the relationship between the lead international tax partner (former AA) and the rest of the partners (Deloitte). In any event, there is definitely a revenge factor. What goes around, comes around. Unfortunately, it is the innocent that end up paying the price.

The other Big 4 do not appear to be cutting international tax people. The second tier firms are eagerly recruiting them.

Looks like the layoffs have started in Deloitte India. They have laid of about 200 people last week. This is no rumor, I myself have lost a dozen on employees from my team. Lucky to survive but donno till when.

The hypocrisy here is amazing. In the February issue of CFO magazine, that arrived on Wednesday, the CEO of Deloitte was talked to for a story, “Scoping out the Talent” –the premise is that it is a buyer’s market for talent and that some companies are positioning themselves as buyers of talent now when the pool is deep. There is discussion of strategic hiring while still making layoffs. A decent article, but this is ridiculous.

” Barry Salzberg, CEO of Deloitte, says his company has no plans to change its recent course, which includes aggressive recruitment and training and an emphasis on “mass career customization,” or allowing employees to shape their careers in ways that match their individual aspirations. “I’ve heard that in the current economy companies are putting the talent agenda on the back burner,” he says, “and I can understand why. But I think it will continue to be difficult to find finance talent.” One factor at work, he says, is an anticipated decline in the number of accounting majors.”

I would like to know how massive, seemingly ad hoc layoffs play into “mass career customization”?

As for “Mass Career Customization” (from Cathy Benko’s book), what a joke! The Deloitte layoffs started at the same time that MCC was being rolled out in certain test offices. The employees forced to promote MCC were told that the tax function was rolling out MCC because there would be no layoffs in tax. The MCC pitch changed with time, as management realized that there would be layoffs (massive layoffs) in tax. Towards the end, attendees were told that they would fall under the “common profile,” not a “dialed up” (advanced track) or “dialed down” (slower track) profile. If everyone falls under the common profile, whose career is being customized? The funniest thing is that DT plans to market the MCC concept thru its consulting arm ($$$$). So, as the head of an organization, if you want 90 pages of compliants written about your company, you should sign up for MCC.

@175 – the DT India layoffs have been perfectly timed. Obama said in his speech to Congress that he would target US companys who ship jobs overseas. Otherwise, Uncle D would have continued to “realign” headcount in the US, while sustaining its Indian headcount. Kudoos to DT and its PR engine.

After my internship at Deloitte which led to me signing an offer to begin this August I wonder whether I should just dump the whole idea and move onto a different place. Why should I pretend that I’ll last more than a month working for a firm that is laying off left and right. I can’t wait to sign a lease downtown only to be ousted and jobless.

Deloitte has stepped up its game. With all negative publicity provided by the ExDeloitte bloggers, their “shock and awe” game no longer works. Their recent tactics include scaring people into leaving, forcing people out and claiming they quit, or using the “fired for cause” line. No severance and unemployment benefits in all three cases. The one’s who have been laid off to date have signed nondisclosure and general release clauses, ensuring sealed lips. This is how Barry Salzberg can make the statements printed in CFO Magazine with a straight face.

I heard that Deloitte is offering Tax Directors 8 months severance to leave. They have a 6 months severance agreement but Deloitte is offering 2 more months in exchange for a legal release (can’t ever sue them) and holding the unemployed Tax Directors to their noncompete policy of 1 to 2 years. Obama, it isn’t just WS and the oil companies that need to be reigned in.

I currently work for Deloitte and have had several good friends suffer from layoffs. I also caught wind that there are going to be further cuts next Thursday in my office. However, most of the cuts being made are of those who are underperforming. The fact of the matter is that times like these call for Company’s to trim the fat and if you do not make yourself stand out and rise above the others at your level, then you are susceptible to being cut. The bottom line is that if you do your job and do it well, and separate yourself through performance you will have no worries. So what if the Big 4 firms is laying off people, aren’t thousand of other companies? Aren’t these same companies that are cutting people and costs the same companies that pay the Big 4? So of course the firms are going to struggle in times like these. What everyone needs to do is focus on their own tasks, do their job better than those around them and they will have nothing to worry about. And to answer the outcry that will follow this post, no I am NOT a partner. I am actually a second year staff and feel as though I have been treated very well by the firm to this point.

The real tragedy is the country moving to socialism. If it wasn’t for that, I’d say we were about 2 years away from this all being a bad memory. Socialism is going to drag this out and make it worse. Thanks Obama!

@186 Hey, Rush Limbaugh called. He wants his schtick back. Seriously though. I’m a fourth year senior. When I started I was as free-market capitalist as the best of them. Spend a couple years auditing large companies, and after seeing how inefficient those operations are and how well those as the top pay themselves in contrast to everyone else, and see if you don’t grow a bit of a populist streak.

@186 I had that same attitude until I saw some of the best in our office get laid off last fall. I certainly encourage my staff and everyone reading to continue to improve and do quality work, but remember not to sell yourself. Work as much as you need to but no more. There are no prizes for those that work the most.

@185 hmm let’s see…mind telling me how they assessed I am under-performing when I had only worked for about 3 weeks total before I got escorted out of the office?

Let’s see…3 weeks, worked on about 7 clients with no prior training provided (shoved me into work from Day One and no-one told me what to do or how to do it)…completed “all” projects before deadline (last project completed in 2 days when it was meant to take 6)…you get the picture

Hey #185, I know some people in my office who were consistently rated highly that were let loose. One of my buddies was a first year at Deloitte in the audit practice…very sharp girl, very articulate, she was consistently rated a 2 throughout her first year. That’s right..a 2! Guess what? She was on the wrong end of the axe back in August. Talent is expendable at this point. Sure, you might have a better chance of making it through the rough waters if your performance is above and beyond. That’s why I’m busting my tail each and every day…and making visits to the office on weekends, if necessary. Despite all this, I personally still have my doubts on whether my stay at this firm will last. I can assure you that there are no guarantees, sad to say, regardless of how you perform. Underperformer or rockstar, everyone’s pretty much fair game right now.

I love the aspiring young republicans who just regurgitate what they read in the editorial section of the WSJ. Stop whining about socialism.

And regarding the impending layoffs at D, there aren’t enough “underperformers” to cut to make up for the loss in revenue we’re sustained this year. That means the majority of those let go will be solid performers. It’s bad enough watching your friends get layed off but it’s even worse when some obnoxious suck-up tries to frame it as fat being trimmed.

I wrote #185. All I know is that these partners are going to get paid, we all know this. They take on the risk so they are going to make sure that their pockets are padded, and obviously as we all know they will pad them as thick as they can. In the same sense, if the firm has to choose between cutting Mr. Joe Average who gets solid 3’s on every engagement or Mrs. Betty Badass who gets 2’s consistently, then it makes business sense and financial sense for them to give ole Joe Average the axe. If Betty is getting her work done more efficiently it means that an hour of Joe’s work is probably worth 45 minutes of Betty’s so financially the partners are getting more “bang for their buck” with Betty. So it makes no sense to lay her off or fire her before Joe.

The fact of the matter is that there is always a reason for one person to be let go over someone else. #190, perhaps the people that you knew weren’t necessarily rated as highly as you think (did you actually see their scorecards???). Or maybe there was a different reason why they were let go. I know for example one individual who was let go and she had claimed she received 2’s on a couple of occasions. However, the reason she was let go is because she would show up late, leave early every day she was unassigned (if she came in at all) and several of the client personnel found her to be abrasive and unprofessional. So scorecards aren’t the only thing that matter. If your senior thinks you are doing well, but doesn’t necessarily see the way you interact with the client then maybe your scorecard doesn’t fully reflect your performance.

All I am saying is that if someone is let go, there is probably a damn good reason why they were let go over someone else. The partners wouldn’t risk their precious “goose that laid the golden egg” (the firm) by letting go the top performers and keeping the below average or average performers it just doesn’t make sense. As for #189, if you are as abrasive, self-righteous, and arrogant in person as you are on a message board, I think I can see why you got escorted out of the office. I mean if they had three weeks to assess you then that is quite a bit more time than the few seconds I just spend, and I would have sent you packing as well.

Actually, I heard that some people, including someone I know, were laid off for not having their CPAs yet. It makes financial sense for the firm – they don’t have any CPA fees or the certification bonus anymore; however it’s a little shortsighted for the firm to ignore ratings and get rid of people who were getting 2’s.

#185 and #192 – check back in with us at the end of this month and let us know if you are still employed. MAJOR cuts to occur at DT this month. See if you still feel the same way and maintain your “great attitude” after it happens to you.

I”m truly amazed how fast you guys can assess my work when all you’ve done is read a single post of mine which was really just stating the obvious

Just as an FYI, I never bragged about my work (and I never would either – esp. in this economy that’s common sense really) and I was simply more than happy to go to work everyday, finish what was expected of me and go home. Sure, I was happy that I was completing my projects before deadlines but that only made me feel that I was doing my work well.

The only reason I got worked up by that early post was how some people seem to think that other people are let go because they were underperforming…you wanna know why I was actually let go? Well here goes (mind you, I even got hints at work by the HR rep that this was the real reason as they simply called me one day at a meeting and told me to pack up without giving me any real reasons whatsoever)

1) I was on OPT so it makes financial sense for the firm to cut my work and hire a local citizen as that would be cheaper (why even give me a job offer in the first place then?)

2) The company was required to sponsor me in order for me to continue working after a certain period – again cheaper for them to just let me off

3) My co-worker hated me (and she actually told me this straight up)…although, I never went out of my way to complain about her (I guess that’s my fault), she did complain about me with my senior (who I had a good professional relationship with)…he told me exactly what was told to him by her (knowing very well the co-worker’s nature) and told me not to worry about it and just keep on doing the work – which I did.

4) In 3 weeks, clearly I didn’t get any performance assessments so I’m sure the complaint played a bigger role than the work that I was doing…unfortunately, I was naive enough to think that my work performance would give me enough credibility that the complaint won’t play a part (being my first “real-world” experience, I didn’t know better sadly – I graduated in Dec ’08 – probably the worst time ever to complete my ugrad)

Now I’m not saying that I wasn’t at fault at all here…I’m sure there must’ve been aspects about me which played to my eventual loss but I do feel that as far as the work itself goes, I was doing very well and I do feel gutted that I got the sack for what seems like no real fault of my own – the only proof I have of this is the fact that my termination letter does not list any reason why I was let go (when I asked them this…they said we already “discussed” why you were let go so no need to write it there – that’s great except they never really gave me a reason in the first place)

Anyways, I see no reason to defend myself against some statements from people who have no idea of my situation and I’m sure at least for the most part don’t even care of my situation (understandably so)…however, I felt it would be better to at least give you guys a better perspective into my situation before you go claiming that I deserved to be let go

p.s. if this still makes me an under-performer or a person with an attitude problem then I guess I’m better off not working with the firm than having to deal with such inflated ego’s (i.e. my co-worker)

95 pages and counting — all dedicated to Deloitte. Scroll to the bottom if you would like to start reading from page 1. It speaks for itself, doesn’t it?

People seem to have a lot of trouble digesting the way the layoffs were handled. Some are predicting a Deloitte March Madness. With all the negative publicity, I personally think that the next wave will be part of the YE evaluation process (May is Deloitte’s fiscal YE). Bottom line – the firm is a sinking ship and there is not enough “low performers” to lay off and cover all their losses.

March 15th is a corporate tax deadline. The people on the big March 15th engagements have been reassured that they are safe. Those doing the reassuring can’t say for certain that they are safe.

When Deloitte laid me off, I got 4 additional weeks of severance for signing a general release. I was told that they had to manage headcount and that it was not performance related. Now, I hear that the partners are claiming that my round of layoffs was actually performance related. In fact, I have heard stories about me that are simply untrue. Can I still sue them, even though I signed the general release? I worked so hard to build my reputation, but now, I am being thrown under the bus.

Megalo…just wanted to clarify, I never meant to imply you were let go for being an underperformer nor that you had an attitude problem at work (although in your earlier post you certainly come across that way). The entire purpose of my second post was simply to point out that at this point ratings aren’t the sole basis for sending someone packing. I think post #193 makes a good point. It is more about cost savings at this point. So sure if they have to choose between someone who does not have their exam passed and someone who does, of course they will pick the person with the CPA from professional perception standpoint and a cost savings (bonus, exam fees, etc.) standpoint. I already know for a fact we are having layoffs in my office on Thursday. One of my best friends at the firm was just told that she was going to be taken off an out of town client and would be unassigned this week instead. She is certain she is being let go and I agree that she probably is. That happened to at least two other individuals so that puts it up to 3 people we know of so far and who knows how many more that are in town and will have no warning.

To my friend at 194, I will in fact check back with you later this month probably even Friday to update everyone on the layoffs. For all I know you may be right, I might be telling the story of getting axed and how it went down. Or I might be telling you the same thing I’ve typed on my last two posts, who knows? I certainly do not, but I will say that of the 3 individuals we have gotten news of so far the trend has continued. One of them being a sub-par performer, and the other two had too much unutilized time and were just average, run of the mill performers. I guess we shall see…

I got the email today for tomorrow meeting. Well, I am actually expecting it coming. I feel a big relief on my shoulder. I was not upset at all, and I am glad that it is all over. Even though my right shoulder and neck still feel the pain from the long hour work, and the weight of my laptop. No more ass kisses, no more scorecards, how good that is. Finally I have time to have my personal plans. So, there is nothing to be sad about. I still remember when i got the email in teh afternoon, I was atucally excited, and laughed…

@197…Although the trend is indeed following for all Big Four firms…I was actually let go by EY not Deloitte (amazingly enough, I think I’ve heard EY’s name the least with regards to cut offs on this blog while, the other 3 seem to be doing this in large numbers…or maybe there just aren’t that many EY people here? who knows)

@199 No I wasn’t saying you were wrong…it makes perfect sense for the firm to keep the high-performers for their own good…however, in my case it wasn’t the performance that led to the axe…it was other factors that weren’t in my control and in the end I just ended up as a pawn in the firm’s (read: partners) bigger plans…sure it sucks for me but I’m sure for the firm its just one person less to worry about

I was only really bitter at that point because your earlier post came to me as you saying that only under-performers were let go (regardless of other reasons)…ofcourse now that you’ve provided a better perspective, I know better…and yeah, my earlier post does reek of attitude issues (I just realized that…my apologies there!) but I hope we are past that stage…not that my current scenario helps – I’ll have to leave the States very soon as the H1-B application seeps closer…but at least I’ll be glad that I left on positive terms everywhere! (including work as I simply accepted the termination letter, took/passed wishes to my HR rep, cleared the paperwork and left the building immediately (no asking why or what…clearly its a decision they had already taken so no amount of losing sleep over it would help)

@199, it helps to be prepared. As you may have heard, Deloitte will ask you to leave and give you very little time (if any) to gather your personal belongings. Some offices have told people that they will ship them their personal belongings, so you might not get everything that you think belongs to you back. As soon as you are told, you will be asked to turn in your computer, blackberry, etc. If you want anything on your computer (such as contacts, former evaluations, outstanding expense submissions, PTO days, etc.), you should start making copies now. Finally, they will offer you a severance package if your ranking is 3 or higher.

Pre-December 2008, Deloitte was offering 4 weeks for each year of service and an additional 4 weeks for signing a general release/nondisclosure statement. If you sign the general release/nondisclosure statement, you can’t ever sue the firm or for that matter, discuss/complain about the firm. Starting January 2008, the rumor was that the severance had been reduced to 2 weeks for each year of severance and an additional 2 weeks for signing a general release/nondisclosure statement. However, many people still claimed that they were receiving the 4 weeks/4 weeks package. It really depends which function you are in. Assuming that you are in AERS, you’ll probably get the 2 weeks/2 weeks package. Let us know if your friends share this information with you.

Finally, you are escorted out of the building. You will have very little (if any) time to say goodbye to your friends. In fact, I would not even count on sending your clients and friends a goodbye e-mail with your contact information. Sign up for facebook, linkedin, or something like that and send out the invites BEFORE it happens to you.

During your severance period, Deloitte treats you as an employee of the firm. You will still receive benefits, so don’t let them tell you otherwise. Once you find a job, you call HR and they pay the remainder of your severance in lump sum. Deloitte claims that you can tell prospective employers that you are still employed with them during this period. However, because they cut off your phone, e-mail, and tell callers that you are no longer employed with them, it pretty much negates that “benefit.” Deloitte does not have to tell clients that you are gone, since you are technically still employed with them. You should let your clients know that you are gone, as they may have positions (or know of positions) for you. In the current economy, people are rather understanding of it. Whatever you do, don’t hide or be embarrassed.

In the past, certain people were given the option of signing a statement saying that they quit and the severance package was further enhanced. Many choose not to pursue that option, but instead picked the separated from the firm package. Also, Deloitte makes you decide right then and there if you want to take the severance package and sign their releases. You cannot consult an attorney or take the agreement home to read. Some people did not even receive a signed copy of the agreement before they left.

Warning, do not piss anyone off during this process. There have been stories of partners claiming that people quit voluntarily or were terminated for cause, which means no severance and unemployment benefits. It would be your word against theirs.

At this point, the partners are not your friend. Their goal is to make sure that you leave without disrupting their employees (who have to continue to work hard and generate $$$) and clients. It is all about protecting the firm and their unit value.

@203, PwC apparently is still claiming no layoffs in tax. Someone blogged that the partners have agreed to paycuts to keep their “performing” employees. For more info, see tonysantiago.com. Not much news on EY layoffs either. The mass layoffs appears to be limited to KPMG and Deloitte.

@198, I’m no lawyer, but here’s my thinking. The release you signed had certain performance expectations on boths sides. You agreed not to sue in return for money, but also for some express or implied promises on Deloitte’s part as well. I would expect that at least one of those promises was to not defame you or undermine your professional reputation to your peers, former co-workers and (perhaps most importantly) to your clients after you were gone.

If you feel that Deloitte breached its side of the bargain, of course you can sue ‘em. Deloitte’s breach would void the agreement.

Whether you win or not is for the Court to decide. But before you do so, consult with a good employment attorney and do a cost/benefit analysis.

#202 – there are a few things that were different for me in your post. I guess it differs by office.

“Finally, you are escorted out of the building. You will have very little (if any) time to say goodbye to your friends.”
– I was not escorted out – I was told to take the time I need to organize my things, drop my laptop / phone off and leave. I could have taken longer but I was in no mood to hang out and chat. I did have to time to copy some personal emails that I needed.

“I would not even count on sending your clients and friends a goodbye e-mail with your contact information.”
– I was specifically told NOT to contact any clients or try to do any handover of work to my team. Having spoken to them since, that hurt the team……they had to pick up the pieces.

“During your severance period, Deloitte treats you as an employee of the firm. You will still receive benefits, so don’t let them tell you otherwise. Once you find a job, you call HR and they pay the remainder of your severance in lump sum. Deloitte claims that you can tell prospective employers that you are still employed with them during this period. However, because they cut off your phone, e-mail, and tell callers that you are no longer employed with them, it pretty much negates that “benefit.” Deloitte does not have to tell clients that you are gone, since you are technically still employed with them.”

– I received my payment shortly after the meeting (the next paycycle I think) and then the remainder after returning the agreement – regardless of having a job. I asked if I could say I was still employed and was told my employment ended on the date I had the exit meeting. Certain benefits did extend but if the firm was asked they would tell people that I no longer worked there.

“Also, Deloitte makes you decide right then and there if you want to take the severance package and sign their releases. You cannot consult an attorney or take the agreement home to read.”
– This was not the case – I had a chance to take it home and had to return it within 10 days. In the end I was not able to consult a lawyer but that was my fault, not Deloitte’s.

I agree with #205 but I am guessing it differs somewhat by office and by practice.
I had 3.5 years with Deloitte and had risen to the mighty level of senior, let go in 12/08
I was paid 4 weeks severance and 4 for the waiver (no appearance of the “I quit statement”)+PTO
I was given the option take extra time to wrap up my engagements if necessary (I think it depends on your level, how hard it is to transition your work, and what you actually are working on whether you get time) I finished out the week.
This ended up with plenty of tears being shed and awkward moments as my friends said their goodbyes.
No one escorted me out, I walked out all by myself and did feel that rush of freedom and possibilities.

**“During your severance period, Deloitte treats you as an employee of the firm. You will still receive benefits, so don’t let them tell you otherwise. Once you find a job, you call HR and they pay the remainder of your severance in lump sum. Deloitte claims that you can tell prospective employers that you are still employed with them during this period. However, because they cut off your phone, e-mail, and tell callers that you are no longer employed with them, it pretty much negates that “benefit.” Deloitte does not have to tell clients that you are gone, since you are technically still employed with them.”

This is true, I didn’t do so since I felt it would be awkward in the long run or could create inconsistencies, and I had nothing to hide. It seems like a nice gesture but I don’t know how helpful it is. They also offered to back any story I wished to offer my coworkers, but having been the recipient of a few vague stories about why people were exiting over the years I decided that wasn’t for me.

All I can say is that I was employed within 3 weeks and earning a good bit more than before. Don’t brood, the economy is causing cuts all over. Sharpen up that resume and go to war on the interview battlefield. Catalogue your skills, inventory your goals and dreams, and follow your bliss. It will hurt, but again, there is pain on all sides. You are not alone, and you won’t be the last.

Re: 202 – Deloitte Exit Process
Not sure where this information is coming from. I know firsthand that they give employees being termed a lot of time to wrap up any open items and to let teammates know where to pick up. They give more than enough time to send out goodbye e-mails to coworkers and transfer personal stuff off Deloitte laptop onto a personal one. They are encouraging people to review the waiver with the lawyer and allow sufficient time to do so. They are not escorting people from the building. Lastly, regarding “partners are not your friend”, they never really are but I did get e-mails after I got the notice both from the partner and the HR wishing me best of luck, etc., etc…

You are at one office, that does not mean that all the other offices work the same. I am not at DT so i cannot say, but people could be bitter and although they are reporting what did happen – for example being escorted out – it may be exaggerated. Who knows, hopefully most are being treated like you since their alumni network is important to their future success.

For 185/192-fyi these layoffs are now purely a numbers game,so dont worry too much about finding a reason..very likely scenario:You,a second year will be promoted to senior in late July,and then laid off in August. CPA,utilization etc mean nothing.

Hey #210, I’m not trying to side with 185/192 because I do agree that layoffs are made with little regard to performance at this point since those who have underpeformed or have been underutilized or have not attained their CPA are likely to have been booted by now. However, please explain the phenomenon of how a second year staff gets promoted to senior only to be ousted the next month. I mean…I have heard of people getting promoted and then let go the next year, but the next MONTH. Maybe I’m not with this part of the program, but I would think the expectation is that those who survive this brutal round and earn the promotion will be kept around for a while (at least longer than a month), otherwise they would get the axe right now. Unless the firm is playing a bad joke on those staff members on the verge of promotion, it would make sense to let them go earlier if they couldn’t see any need for them at the senior level (or whatever level is to be reached by that staff). In defense of the second years that may be part of such a scenario, that would be a waste of their time and would leave an ugly impression of the firms.

I think 210’s point is that there is no rhyme or reason to these decisions. Left hand does not talk to the right hand. Nothing makes sense.

Btw, top performing managers are getting booted so that the partners can claim exclusive credit for the booted managers’ clients. Especially since in the good days these partners readily handed control of the clients to the managers so that the partners themselves can go home early. It is everyone out for themselves. You may get booted if you do too good of a job and your superior views you as a threat. I have personally experienced and witnessed it.

Francine’s article in the Huffington Post about the Big 4 and mafia is on point. Does the mafia prefer intelligent, independent thinking people or stupid, but loyal people?

Decisions on whether you will be canned are made on FUTURE REVENUE ESTIMATES.

We Auditors/Accountants are used to analyzing the past so maybe some people wont get get this easily.The firm does not care about what makes sense or what looks bad, or what seems like a joke like 211 said….if they think that they wont make enough money in the future they will cann your ass!! simple

And i am sure the next question is ..who will do the work?: Dont worry they will figure it out…R10,Newbies,exixting drones……it will be done.

I personally know more than 15 people that were promoted to seniors and canned(not talking H-1B’s,or people with issues)and a couple of mgrs who were promoted to Snr and canned soon afterwards…..these are just the ons I know about in my little corner.

210 (and 213 presumably), I fully agree that performance evaluations are historically based – that goes without mentioning. I also agree that layoffs can be a function of revenue forecasts and that if the firm does not see itself meeting those revenue estimates that people will get canned. However my question still remains – if partners are able to forecast negative revenue growth into the next fiscal year and conclude that layoffs need to be made, why not throw the gauntlet(s) now instead of waiting until August? Can the partners not see that far beyond July/August at this point to decide whether to keep a staff member?

Once someone gets promoted, they are held to a higher standard. So if you were a senior today and got promoted tomorrow, you are evaluated as a manager tomorrow. Isn’t it easier to target the newly or recently promoted and say they aren’t meeting expectations? But, what do you expect? Keep in mind of course that these same partners promoted people to retain them during the good times. It is called retention through promotion. Read Francine’s Huffington Post article. It is all a game, similar to the mafia, and those in control get to do whatever and say whatever they want. See what happens when you try to tell a mafia boss that something is unfair in your opinion. At least Deloitte only fires and doesn’t murder (that we know of).

There was a Tax Director in the Dallas office who mysteriously died and was found dead in her apartment when she was on an overseas assignment. The Dallas OTMP repeatedly “encouraged” everyone to attend her funeral. No accusations … just the facts …

Deloitte – Dallas international tax practice has been trickling in the layoffs. Most recently, the partners are having individual conversations with people in the group and suggesting that we look for jobs outside the firm. Prior to these conversations, they asked people to volunteer for overseas assignments, but we hear that those will not pan out. Once people started talking to one another, it became clear that this is happening across the board. It doesn’t seem like they care who leaves, but just that headcount is reduced. We think that they are afraid to officially lay off too many people and of having clients question their stability. So, we’re left with a few being laid off or supposedly “pursuing other opportunities” almost every week. It makes us so nervous not knowing what is going on.

Business Week proclaims that the BIG 4 is at the top of the list for a “Great Place to Launch a Career”.

This is nothing but plaine and simple B.S. These firms are miserable places to work and the greedy and repacious S.O.B.s aka as partners or Tefflon Dons should leave in hand-cuffs.

You partners reading this think you can get away with throwing your staff under the bus like this? Seriously? You’ve got another thing coming. We are gonna make your lives absolutely miserable you self-serving miserable greedy A-holes.

Big 4 pay millions for propaganda and the keep their “BRAND IMAGE”…lasy year soon after the local Deloitte office laid off 200 plus,the local business journal wrote 3-pager,with graphs and charts and all about how Deloitte and other big 4 had magnificent growth prospects and were hiring 1000’s…..BS of course……dont believe the hype…these cats will with cut 500 harworking people to save 500K but will spend millions of advertising at the same time….

BearingPoint appears to be in the pipeline as an aquisition for Deloitte. It seems obvious that the layoffs that the firm had appear to be a method to free up capital to make the purchase as well as keep the partner’s $/unit in line with expectations. Really, how bad are things if they have $350 million to shell out?

do you think one could sue Deloitte for creating false performance reviews or documenting false issues and ganging up against an individual to create a consensus so that they can lay off or fire someone for cause? They seem to do this pretty often and claim the backing of the best lawyers. Also forcing you to sign a waiver to sue in return for 2 weeks additional severance. anyone with similar experiences? what thoughts? any lawyers on this board?

How does Deloitte create false reviews? Scorecards are initiated by you (the one being evaluated). You complete your own assessment of your performance. It then goes to a primary reviewer and secondary reviewer and they can either agree with your ranking or change it. After which time, you then have the final opportunity to comment on their score/notes relative to your performance. Nothing unfair in that.

They don’t force you to sign a waiver. They give you a choice. It’s common practice in the financial service industry. Merrill Lynch, Bank of America and many other companies do it as well. Here’s a link for you. If you don’t want to sign the waiver, you’re under no oblgigation to do so. I understand you’re frustrated but don’t let the frustration cloud your judgment.

‘Can’t Be Right’ (From Yesterday’s Bloomberg feed re Merrill/B of A)

On Jan. 22, in a scene played out at banks thousands of times, Godhania says he was called into a room with a department head and a woman from human resources. The boss read a couple of lines telling him his job was being eliminated and walked out. The human resources person then outlined the exit package. She gave him a form, he says, that would have granted him three more weeks of pay if he agreed not to sue Merrill or Bank of America and says he had 45 days to sign it. He never signed.http://www.bloomberg.com/apps/news?pid=20601109&sid=agdquPfpIk78&refer=home

@221 – if you believe that you have been unjustly treated by Deloitte and have a case, you should consult an employment attorney who works for plaintiffs. The initial consultation is usually free of charge. If the attorney believes that you have a case, he/she may work for you on a contingency basis. This means that he/she would split the winning with you so you are not charged the high hourly rates.

You are right that Deloitte has an army of employment attorneys on hand. They will try to drag things out, waste your time, and wear you down. Even if Deloitte realizes that their partners wronged you, they will stick together to protect the reputation of the firm. Through this process, you may even find your friends turn against you because they will not jeopardize their livelihood for you.

@AA – nice summary of the Deloitte evaluation process. Are you saying that you have to actually complete a scorecard for someone before trashing them in an evaluation meeting? If true, someone forgot to tell HR.

On behalf of Deloitte, specifically those who stand to gain from this acquisition, I would like to thank all of you who were laid for providing us the available capital to acquire this bulk of dead-weight that is BearingPoint. While I know it may be tough being unemployed in the current state of the economy, those who stand to profit greatly from this acquisition would like to reimburse you for your part in the process…

How about this: for the engagements that you work on – if they are public – why don’t you write letter to the Audit Committee – maybe in the form of a complaint and outline things that the firm did to waste time/money – but of course do it so the client can know so that can remedy the situation by either going out for bid or pushing back on the fees. Letters to the audit committee (i.e. whistle-blowers) have to be investigated. Then send a letter to Deloitte saying that an allegation reported on XX/XX/2009 was not properly investigated. HAHA. As if the partner wouldn’t get a phone call. Then write a letter to the PCAOB and claim the audit committee isn’t following their Code of Ethics and Deloitte isn’t testing softer COSO. Even if you don’t get any $ (which may be hard to prove once they took you computer unless you started printing stuff) you will at least cause some drama for the partner – then send the partner an email a week later with a link to fmylife.com and ask where there post is. Muahahahaha. I am evil. I can provide more ways to – er – help robertcohn70070@yahoo.com.

I am sorry to hear people have been laid off, but in case you have not noticed we are in a recession and they are laying off everywhere, including people that have spent 20+ years at companys so I have little sympathy for some 25 year old kid that get’s laid off from his 70k plus job after working for 3 years. MAybe not Gen Y,X, whatever will start to appreciate what they have and work a little harder to get ahead. I bet your mommy and daddy helicopter parents can’t help you now and you don’t know what to do. time to grow up and be an adult.

AA & Former Auditor – just thinking about your partner draws this year has me roaring with laughter. Nothing will replace the firm’s lost revenue stream because Deloitte’s reputation is in the tank. Hope you don’t lose your overpriced house, car, and wife. You know she really can’t stand you, right?

Negative references about the Gen X’s and Y’s are usually made by crusty partners who have had a hard time selling the”work 80 week hour weeks and be glad we gave you a job” line. Crusty partners, who themselves don’t work, can’t retire with style unless the Gen X’s and Y’s conform to their plans.

Remember this, even if you lay off the 20 somethings, they will have many years to rebound and make a good living. You, on the other hand, get to watch your investments DISAPPEAR, with little time to rebound. Enjoy your retirement. Let’s hope no one tosses your lazy butt out any time soon, Chet.

That was hilarious…but future food for thought though…i like the way we collaborate out here….btw – i hope you are smart enough not to put your own name in that email? if no – maybe plead to fm to expunge quick…

I giggled when I read your response. Let Deloitte look for a Robert Cohn in zip code 70070. I am much to smart for that (slight sarcasm). I keep diaries of all engagements and I re-review prior years’ work for all instances where GAAS/PCAOB required procedures were not performed or performed inadequately. Then on scorecards I like comments that state I “[…]strive for audit improvement over prior years.” And if I get laid off I will NOT sign the release for two extra weeks severance. I want to be able to blog about my experience. And for the record – I like my job. I just don’t think people get treated fairly.

@231: are you saying that if you sign the general release, you are prohibited from blogging about your experience on the internet? I had heard that there was a nondisclosure provision included in the general release, but ignorantly failed to realize that it extended to blogging. If what you are saying is true, it makes sense why all the first hand layoff experience blogs have significantly diminished. After the mishandling of the DT layoffs in August, the powers that be must have gotten clever to prohibit people from sharing their experiences. It fits the DT motto of abuse and cover up.

I know for a fact that the layoffs are continuing. People are extremely fearful of losing their job, especially since they are being kept in the dark. Now, I understand why the blogging has ceased.

WIth the current economy, layoffs are understandable. The way DT is handling the layoffs is outrageous and against the law in some instances. It’s fine, because they’ve got their general releases.

@221: re Deloitte scorecards – I have no reason personally to believe that they are made up, however there is a big leap from the scorecards to the actual rating.
For example, on a scorecard you can only rate a good performer as 2 (exceeding expectations) or 3 (meeting expectations) – of course 4 or 5 are possible if the person is not performing. In reality 4 or 5 are rarely used in individual scorecards and from what I’ve seen if someone gets a 4/5 they usually are deserving of it. So almost all scorecards are 2/3s. It is entirely possible for people to have scorecards showing nothing but 2s and be rated a 1,2 or 3. So there are so many other factors that go into the evaluations, there is no real need to make up scorecards as they are only a small part of the process. I personally had all 2s on my recent scorecards (all from partners) and got the chop…..

Hmmm. I never thought about that. You made me think. Now I am going to have to think twice about signing any offer they give me in the event that I am laid off. Or sign a different name and see if they catch it. I suppose they have the general non-disclosure from when I was first hired, but as long as I don’t reveal client info I doubt it would violate the non-disclosure if I blogged about my personal work experiences. I think it would be to suspicious if I asked to see it.

To bad the domain deloittesucks.com is already taken. It is a private registration (you can’t see who owns it).

The scorecard is a very very stupid thing. All the employees, even the smartest kids have to kiss their reviewers’ ass sooo hard in order not to get a bad score. Living in such a terrified environment, most of the deloitte employees are already mental distorted. It is not about how smart you are, it is all about who you know, and if you kiss the right ass. What a joke!

Learned of 5 impending tax cuts with DT-Dallas. News already communicated by partners, although most of the immediate managers were not consulted. There may be more. Those who have yet to be cut have been advised to start looking. These people have been looking for some time, given the flood of resume in the market place.

If you are a client and your assigned DT team starts to disappear, it isn’t because they have been assigned to another client. Sneaky!

Re: 236 – If you think this is exclusive to D&T you are sadly mistaken. This is the way of the world and anywhere you go it will always matter (at least to a certain extent) who you know. Not that you have to kiss ass, but you need to make sure that the right people (decision makers) know who you are and know what you are capable of. If not then you will suffer the consequences.

Jobs, like life, are a social thing — it is a community with a culture and goals and pecking order and mores and all those things. As such, interactions with others is part of your job — office politics counts and it takes a long, long time to get good at that. Often the smarter you are the worse you are at those politics — but it is important in the end. Politics help you manage a team, market to new clients, manage your clients, get ahead…

It would be terrific if smart people were rewarded for being smart and getting the work done. Unfortunately, the way of the world (Big 4 or not) is that the soft skills matter just as much, and ultimately the people who get ahead the farthest are those who are good at the soft skills. While both sides need each other — i.e., one cannot sell or manage a project if there are not people who are smart enough to do the work and do it right, yet one cannot do the job if there are not people who can sell it and manage it well — in the end, what gets you ahead is being able to sell it and manage it.

I disagree with the culture that says implementation and execution are less valuable or easier to teach people to do and thus do not get the high pay or the big titles. But it is the way it is in all companies everywhere. The real unfortunate thing is that this model is based on the idea that those who can do the work grow into managing it and selling it. The actuality is that often those who cannot do it learn to manage and sell it. So in the end the do-ers wind up angry that their superiors by title and pay are incompentent and do not respect their intelligence and ability. You can resent that all you want — but that will not solve the problem or get you ahead.

Remember this — they (the incompetent management) are threatened by your intelligence and ability. Seek out the managers who were the smart staff members as they generally will be better (if the others in management haven’t brainwashed them). And recognize that it isn’t A**kissing — it is working within the mores and norms of the corporate culture… and it is reality.

To the smartest of people reading this — remember that you are at the top of the curve, and you could not be there unless there were 90% of the less smart behind you. You have to learn to work with them – because they are everywhere, and we cannot employ only the top 10% smartest people in the world. Smart people have 2 choices — learn to game the system too, or get so good in a super specialized niche that you will get paid a lot to sit in the corner and do that work on your own (cause no one else can do it). But the sit in the corner model has a lower maximum pay in the end – you have to accept that.

I was let go from the Deloitte Service. The reason which my manager told me that I was supporting non critical channels which are the Talent and the R&D. However our CEO repeatly told us that the “Talent is the only assets which D has and R&D is the future of the firm”. Then you can know the trustworthy of the D. I am happy to go with 14 weeks (10+4). Good luck to everyone.

The condition of the lease is “Not Disclose”. However, most the GL is legal term and make no senses to average people except you want to go to the court. It is the case, you should not sign it for the 4-weeks. Otherwise, just take it and move on the life.

PS There is almost no legal chance based upon the economic conditions. Even you have case, the battle would drag on for years and eventually, everyone is the loser.

new york audit laid off a round of sr mgrs and below this week. partners have been demoted or asked to leave. Moral is way down — as it should be. It will be interesting to see what happens to our firm when the economy picks up again. How many will stay? There is no reason for any loyalty.

@250: what do you mean by “partners have been demoted”? Are they still partners, with units taken away? Or, are they now directors or senior managers?
In this economy, isn’t it better to be a salaried director or senior manager than a partner? Or, are you saying that it is easier for the firm to fire a non-partner than partners. Assuming yes, the demotions may be the first in a series of steps to ultimately fire these people. It seems that partners are not safe in this environment either. They too must kiss the right a**es.

252: partners are being “asked” to be directors (return their units). Ultimate goal is to maintain/increase unit value for remaining partners. With business bad, and expected to stay that way for awhile, can’t keep 1000/unit for as many partners. Firm wants to keep them as directors. Less pay, higher unit value. Definitely not a “partnership”. Anyone know what other firms are doing?

Why not ask the older partners – most of whom no longer generate revenue – to take an early retirement? These guys are usually the ones being paid the most units and not bringing in any $$. Keep the younger partners, who are being paid less units. It would certainly be better for moral. But then again, once you demote a partner to director they are now a salaried employee and can now be fired. And my guess is that Deloitte knows this and will use it to their advantage.

The law firm of Kershaw, Cutter & Ratinoff (“KCR”) is currently investigating potential class action lawsuits on behalf of associates at Big 4 Accounting Firms who have not yet obtained their CPA license. KCR believes that these unlicensed associates have been improperly denied overtime and other benefits under the federal Fair Labor and Standards Act (FLSA), and state laws, including the California Division of Labor Standards Enforcement. The Big 4 Accounting Firms at issue are:

PricewaterhouseCoopers
KPMG
Ernst & Young
Deloite & Touche

Under federal and many state laws, only “exempt” employees can be denied overtime pay and mandated meal and rest periods. With respect to accountants, these laws provide that only those who have first obtained a CPA license can properly be classified as “exempt” employees. This is true even if the accounting firm pays its associates a salary and does not require associates to keep track of the hours they work.

For years, the Big 4 Accounting Firms have ignored these statutes and have improperly treated all of their unlicensed associates as exempt employees. Given the long hours that young associates typically work, this has likely resulted in thousands of dollars in potential damages to affected workers.

In fact, an associate who earned $42,000 a year and worked approximately 250 hours of overtime per year may be entitled to approximately $40,000 in overtime pay over a 5-year period. This amount does not even include the substantial penalties and interest that would be imposed for the willful failure to pay overtime.

The actions of the Big 4 Accounting Firms are in stark contrast to many smaller accounting firms who have always treated their unlicensed associates as non-exempt employees.

KCR has already filed a class action suit against the largest Big 4 Accounting Firm, PricewaterhouseCoopers (“PwC”) to recover overtime for its unlicensed associates. The case has been pending for more than a year, and the issue of whether the case will be approved as a class action should be decided shortly.

If the Court agrees to certify the class, this will be the first time that a Big 4 Accounting Firm will face the threat of actually having to comply with laws mandating the payment of overtime on a company-wide basis. A successful verdict in this case could potentially change the way all Big 4 Accounting Firms do business nationwide.

Contact Kershaw, Cutter & Ratinoff

If you worked for any of the Big 4 Accounting Firms as an unlicensed associate within the last four years, we would like to hear from you. Please contact us one of the following ways:

Be careful what you wish for — being reclassified as hourly rather than exempt may change a lot of other things. One logical response is that the salary of hourly would be decreased as the claim is that these employees no longer have specialized training which demands that higher value. The idea is that the overall compensation would not be significantly different… it is the mechanism of how an hourly vs. exempt employee is paid.

How they will handle retroactive claims is a real question. I imagine the arguement by the B4 will be that they have historically paid salaries too high for comparable hourly employees. The settlement will be an adjustment of both the salaried 40 hour/week wage and the overtime pay.

KCR or Stuart, I am aware of countless cases where Deloitte has targeted women (even pregnant women) and minorities in the layoffs. Specifically, certain partners have actively plotted to take projects away from certain individuals and giving them to others, to create low chargeability and substantiate their bogus layoff decisions. Would you be interested in investigating a potential class action law suit on behalf of these discriminated classes? If yes, would you please confirm on this blog? In addition, it would be extremely helpful if you would comment on the sustainability of the general releases in court, as Deloitte is counting on these general releases (plus their league of attorneys) as protection.

Given the significant number of layoffs to date and the massive negative blogging that has ensued, those still employed with Deloitte are extremely paranoid. To prevent a “run on the bank” (if you will), some of the partners and their a**kissing crownies are actively dispelling any fears of more layoffs, even if it is a blatant lie. This gives the partners the advantage of surprising the employees with future layoffs and conducting the layoffs under the partners’ terms. Fear and desperation cause people to undertake actions that they would not undertake under normal situations, including being bullied into signing general releases. Those who have refused have been told that they are the only one’s who have refused. Please comment on the legal recourse (if any), in this regard.

Ya well I’m a college senior and in response to 257 I understand that people might be made but come on!!! Every single person who enters into a big 4 firm knows the hours that they will put in. This is just another example of lawyers screwing up the system for everyone so Mr. “I went to a good school but didn’t get my CPA” can benefit from the fact of their laziness and work the system……. I mean seriously…. grow a pair

If you can be there in person in Cincinnati on Monday night, you are welcome.
The Pinnacle Group:
9100 West Chester Towne Centre Drive, Suite 225
West Chester, OH 45069
Phone: 513.874.4440
Conference Call Information:
Please dial 1-888-566-8440 and dial 366721# as your participant pass code.
A group of primarily ex-Deloitters and others will gather with me to talk through these issues and also the future. 4-6 est. Conference call line available. I will have an employment lawyer on the call to answer questions and provide info on resources. Although you can not consider what he says “legal advice” and a “attorney-client” relationship cannot develop over the phone and without active agreement on both sides, Eric Meyer of http://www.dilworthlaw.com has offered to listen in and help where possible with questions.

RE Class Action – I’m not a lawyer but a CPA at the Big Four. I was sent that link so I posted it for others who may be interested in replying. Best bet is to follow up directly via their website. Hope that didn’t mislead you…

@261/Just a Senior, to fully appreciate the beauty of this class action lawsuit, think of OJ Simpson as innocent from the murder of Nicole Brown Simpson (his wife) and as guilty/ thrown in jail for trying to steal back his trophy from a high school years later. If you really are Just a Senior, you may be too young to remember this and will have to google it. In the case at hand, people have been unable to hold Deloitte accountable for its unfair employment practices, but there are other ways to hold them accountable. The key is to break up the monopoly of the Big 4 firms and stop their abuses in sooooo many areas.

@FM, are you prepared for the Deloitte crownies who may show up at your meeting (or on your call) to disrupt things? If you use Live Meeting, people can be on listen only mode and submit their questions in written form so that you can decide which legitimate questions to answer. Perhaps you’ll also have the police there to “escort” people out. You know how the Big 4 love to “escort” people out.

One question for the attorney — if someone has signed a general release (i.e., can’t sue the firm), can the person still testify as a witness for someone else suing the firm?

FM, could you build a “forward this link” feature into each of your blogs? When I mention your blogs, many people are extremely interested. It would be so much easier to forward specific blogs to these people directly from your site.

I don’t expect any trouble… I did think about the fact that Deloitte (or other firm) folks could listen in on con call without us knowing. I will talk to my hosts and see if there is a better tool, but even registration is sort of problematic. 99% of people who read and participate in the blog have to be anonymous. Of course people I meet in person, email with or talk to on the phone almost always identify themselves, but in public settings, it’s probably best anyway to not identify yourself in a crowd. If someone on the con call is disruptive, we’ll see how that would be handled.

If someone is disruptive in person…. Since I’m driving, maybe I should bring Rosie Rott with me?

Thanks for reminding me about all the mini-widgets that belong at the end of the blog posts. Email, print, Digg, StumbleUpon, Delicious, etc. That’s why I’m still in “Beta.” Can’t do everything myself anymore. I’m going have to move that up on the to-do list for my tech/designer guru, Jason at Wise Elephant.
Francine

It seems that a divergent opinion is “disruptive” based on paranoid expectations. If this is a closed strategizing meeting then maybe divergent opinions are not appropriate. If this is a meeting to discuss the issues from all angles and persuade others to understand your perspecitive or be persuaded if that is appropriate — then why isn’t everyone welcome with open arms… or at least not deemed “disruptive” before they walked in the door.

It looks that the new round of Dloitte’s layoff is coming to the end. I estimated Deloitte US has laid-off 10 to 15% of employees since last August. Do you think that is enough to compensate lost businesses such as AIG and Lehman Brothers… And also is it enough to let the D hanging there until the economy growth again?

Perhaps @Anonymous 8:02 was referring to Deloitte Consulting losing business because of losing consulting clients. What I have not emphasized enough is that compression of the overall client base, esp in FS, via the bankruptcies, nationalizations, financial difficulties at clients who’ve survived and forced takeover of others like WAMU and Wachovia have also caused business to be lost for the firms on their Advisory side. Deloitte’s is the largest and most established and the only one that was doing large systems implementations. They are bound to have seen a big drop-off there for every firm that has disappeared or closed their pocketbooks to consultants.Siemens, for example, an up until recently KPMG (now EY) audit client was a big PwC Advisory client. They have cut out all outside consulting given their desire to save money after their world -record fines for FCPA violations.

Why are people talking about Lehman? Forgot about Bear and Merrill? Merrill was at least a $100m client with audit/tax/consulting rolled together. There were 24/7 project teams at the WorldFi office for Merrill. Wouldn’t be surprised if it wiped out 10% of the NYC office’s revenue.

Just from the Audit side, Deloitte has lost major clients like Bears Stearns, Merrill, Cantor Fitzgerald, the World Bank (off rotation), WaMu, Ralph Lauren Polo, and probably GM later on.. They estimated that the firm lost almost 1 billion in revenue. That explains why the management thinks that layoff is its only solution at this point, because they don’t foresee they will recover from the lost at any time soon. That is definitely bad news to all their employees. Another round of layoff will be taken place in May or early June after the year-end evaluations, perhaps more in early September. More and more partners will be demoted to Directors, and some partners will get early retirements (better terms for layoff at partner level). Their plan is to balance the headcount between Partners and Directors to 50/50 so to maintain their unit value. In addition, of course, for all the managers and senior managers, what makes them to stay and think that Uncle D will make more partners when they cannot wait to getting rid of existing partners? This is really bad to DT, because when the good time comes, most of talented people will leave…

If you are still working for DT, this is the time to update your resume…

@273, I know there are still a lot of AERS people doing bankruptcy works at Lehman now. I am sure they got paid a lot of money. God bless them, this is their last shot, and they are milking Lehman whatever they can get. But what happen after that?

Human capital layoffs were announced for o & c… timeline: between today and June 1.

It was discussed in a town hall and is no secret.. I just wanted to comment on how jumpy the HR person got when the discussion of “criteria” came up. “Absolutely NOBODY will ever know criteria – EVER!” was the message but delivered as “We look at everything – belive me – it’s incredibly frustrating and difficult.”

What the hell is so problematic about giving a CLUE as to the criteria? What does the process map look like…. here are some items that could be on there:

A. If we lay off this person, will we get sued for any kind of discrimination. Is anyone left in their BRG?
B. Do we have enough demand in the future for this person
C. How has this person’s performance been?
D. Does the person have a network? Are they actively engaged in maintaining and extending that network?
E. Is this someone who will be successful at a client and then never hire us?
F. Did this person come from a top tier school who we’d hurt relations with (via their alumni network / friends in high places) if we laid them off?
G. Does X like this person – because I don’t like X and X will probably be next to go… (and other cliquey bullshit)
H. Utilization and expected utilization based on above issues

And on and on it goes…your guess is as good as mine. I really want to hear the discussions they are having from a purely curious standpoint.

To see that kind of reaction to the issue of “criteria” (the most basic thing everyone wants to know) is telling. I expected her not to disclose criteria, but there was some shock there…

Deloitte is closing its Houston, Chicago and NYC Document & Creative Services centers over the next few months. All local walkup support in each office will be eliminated in two weeks. The only remaining DCS will be in Atlanta, Pittsburgh and LA. And of course India.

I’ve seen E happen. The pool of clients and services is just shrinking. It’s becoming inevitable that the Big4 and the Mids will bump into one of their former workers at a new or returning client. Non-competes are a nuisance cost to enforce for lower-level employees; they’re a bigger deal for those higher up on the food chain.

F just makes me laugh, as I’ve experienced it myself – I’ve never seen someone so embarrassed, uncomfortable and in such a hurry to leave!

What you listed sounds like what’s discussed behind closed doors at the partner level (or so). I wouldn’t be surprised if HR knows absolutely nothing about how it works. (Really, how often do you interact with HR, in person or by email, other than to fill out paperwork?) They work for the partners. Their primary job(s) is to prevent the company from being sued, as well as to keep personnel costs down. They have little authority or decision-making powers. All they do is take orders from above and push the paperwork around.

#275 – you are right about the major client loss – the NY office has lost a major part of it’s client base with the financial companies going under / switching ownership. A partner told me around 2 months ago that they were already planning their March and June layoffs – that partner had never heard of them planning two rounds of layoffs ahead….

At one time, the NE (Tristate) region produced 25% of the US firm’s revenues. With the demise of the financial services industry and Deloitte’s associated services, that percentage is and will continue to be way down. I understand that the unit values this year will be in the $900. That’s down from an almost record year of over $1200 last year. Senior management is trying to preserve the unit value (compensation) for the remaining partners as close to $1000 as possible. I guess they got a “taste of the good life” and don’t want to lose it, I remember in the past when the partnership would try to hold on to their staff and get paid less.

Oh well, maybe more kids will become something useful, like engineers or md’s instead of consultants.

Here are some thoughts about DT and its layoffs. Yes, #275 is right, they lost a bunch of important clients last year, and thus the layoffs seem to be inevitable. However, their problems, in my opinion, are more than that. One of the key problems has to do with DT’s partner group, its leaders and decisions they made. Over the peak of SOX period, DT partners were way too comfortable with the windfall profit, and they thought the money could just fall from the sky and the double-digit growth could last forever. They over-hired, and made way too many partners. Do you know what they have lost over the years? The basic sense of business. You must think it is a joke if I tell you that they originally forecasted another double-digit growth for the fiscal year 2009 (DT’s fiscal year is from June 1 to May 30). Yes, it is true, and we all thought the partners were on something when they did the plan.

Remember one thing, the only criteria to become a “leader” in DT is that you have to be good at client services. Unfortunately, good “client services” do not automatically transform into 2 things: 1) good auditor, 2) and most importantly, good leadership. When bad time hit in September, their responses was slow and no one seemed to know what to do. Other than layoff and more layoffs, they pretty much didn’t do anything else or anything differently. Business as usual, and their primary focus has been only on their profitability (or unit value), which translates into higher rate per hour of each engagement. What is the consequence of that? The audit teams had to complete the same amount of work but their budget hours were reduced significantly. Technically the poor kids could choose either to “eat” hours or to cut some corners and do less work. Take a wild guess which one they would pick? (Not to mentioned that those poor kids got let go right after their work was done.) I am sure their clients would appreciate their “Deloitte Experiences”. On the other hand, higher rate per hour eliminated their competitive advantages in selling events when others were all cutting their fees during the economy crisis. DT has been losing market share left and right to its competitors. It was so strange to me that a lot of DT partners knew that their competitors were cutting prices since March/April 2008, but they chose to do nothing. And now you look at their new “go to market” strategy. It is a joke. .

One of my campus new hires asked me how come the partners don’t understand the business 101 that during bad time is all about market share and good time is about profitability. I did not know how to answer that question and told him to ask the partners himself. To be fair, I do want to give some credits to Barry and his Straight Talks. He seems to be the only one jumping around and trying to do something. He must be so tried. Where are the others?

Finally to answer #281’s question, yes, there will be more layoffs coming. The boat is sinking and the captain has no idea what he is doing. Jump as early as you can. Jump as quickly as you can…

With new partners averaging 300 units, their “pay” would be reduced from $360,000 to $270,000. More seasoned partners average 500 units, while partners in leadership roles may hold around 1,000 units. So, your OMP-is partners will be taking home $900,000 this year, rather than $1,200,000, for their brilliant layoff strategies. With this sort of cut, how can one manage to support one’s family?

Nice, thoughtful post. I have posted before on problems with the firms’ planning and budgeting process. What you describe about Deloitte’s planning is not solely a Deloitte issue. You need to keep in mind that the ability to establish budgets that lead to high partner compensation is a key prerequisite to maintaining one’s leadership position. Think of a herd mentality. The first senior partner who tells the truth about real market conditions and proposes a realistic budget that takes into account those conditions, will be an outlier and the rest of the herd will turn on him/her. Remember the story of the Emperor’s New Clothes? In the world of the Big 4, the child who cried out that the Emperor had no clothes would be immediately taken away and everybody would go on pretending. They would pretend along with everybody else until (a) they retired, or (b) they changed leadership.

Blind optimism and a cheerful willingness to commit to unachievable numbers are both attributes that lead to a successful career in the Big 4.

I’ve also posted, several times, on the leadership problems at the firms. What you describe about Deloitte leadership is not solely a Deloitte issue. The attributes that make good leaders are NOT attributes that lead to a successful career in the Big 4. Business knowledge is NOT key to attaining a leadership position, nor is technical competence. Some of the keys to firm leadership include: blind optimism and a cheerful wilingness to commit to unachievable numbers (see above), abilty to schmooze and build relationships both internally and externally, ability to sell work and oversee successful engagements, ability to align with the herd and follow the group-think, abiltity to create/join a key initiative and get credit for its success (regardless of whether it is successful), and good looks. There are others, I’m sure.

In other words, the captain has no idea what he’s doing, but the ship is not named Deloitte: it’s named Deloitte/KPMG/PwC/EY and it has sister ships named BDO/McGladrey/GrantThornton as well.

Agree with Truman @ 285 – no one is doing it right. there is alot of chatter out there but the one thing you don’t hear is ‘you know who is doing this right? company X, that’s who!’ no one feels that any big 4 is setting the reactionary model for this kind of economy.

A friend of mine, who is a 2nd year sued D, and got a big trunk of money back. I think it is a good idea of getting all the auditors together and sue that cruel firm. One person won’t change the world, but a crowd would definitely help the society to realize that how cold-bloodedly the big 4 are. The big 4 is like a mental institution in my opinion.

Blind optimism and a cheerful willingness to commit to unachievable numbers —

These are characteristics of a salesperson, regardless of B4 or not. They all do it in every company and every business. It is up to those who will have to do the work to educate them and push back at them so that they do not commit to what is completely infeasible. If they overcommit too much — they will get fired. It just takes a little longer to hit them.

In every business the culture in the US is to reward the marketer — they are bringing in the business. The people who implement the solutions are second tier in the culture — fair or unfair… it just is. The marketer will be the last to get cut, because the first accusations are that the implementers are incompetent. It takes time to prove that it is the marketer that is unrealistic. But, in some cases, the implementers find ways to be more efficient due to the pressure to do so… in which case it becomes a win and the marketer gets the credit.

Whine about it all you want — but this is a US culture, maybe a global business culture, thing. It has little to nothing to do with the B4. It hasn’t changed in my lifetime or my father’s lifetime… not sure if it was ever any different. Maybe we should all go back to hunting and gathering – maybe that economy was more fair?

1. “These are characteristics of a salesperson, regardless of B4 or not.” No, not really. Salespeople commit to achievable numbers, knowing that if they exceed the commitment they are in line for a bonus. In any case, how many accountants go to college and study for the CPA, in order to become salespeople? You think that was the underlying career choice? And just to add icing to your cake, I have already posted elsewhere on this blog that accounting majors should take classes in psychology and sales, because those skills are more highly valued than accounting technical skills in the Big 4.

2. “It is up to those who will have to do the work to educate them and push back at them so that they do not commit to what is completely infeasible.” So now it is up to the staff to point out that their partners are insane? Or, if you prefer, for the junior partners to point out to the rest of the partnership that the firm leadership is insane? Are you insane? In my experience, such CLM behavior is no way to succeed in the Big 4. That said, I would totally respect anybody who actually had the cojones to try. Even if that meant that the end result was ¡Se partian los cojones! [Fran, did I get that part right?]

3. “If they overcommit too much — they will get fired. It just takes a little longer to hit them.” Exactly. So, when does firm leadership get fired? That’s the main issue, isn’t it? If anybody is whining about anything, it’s the complete lack of accountability at the senior levels of firm leadership.

4. “In every business the culture in the US is to reward the marketer — they are bringing in the business.” First, nobody said otherwise. Second, do you think BigLaw firms “reward the marketeer” — or do they perhaps reward the successful litigator or partner who actually executes? Do you think a multi-national engineering firm compensates salespeople significantly more than its top-level engineers? Do you believe that Big Accounting should be significantly different from a professional legal firm or a professional engineering corporation? Do you think sales directors should get paid more than partners? Dude, we are not talking about selling DVD players or recreational vehicles here. Allegedly, there is some level of professional expertise involved. Do you believe otherwise?

5. “The marketer will be the last to get cut, because the first accusations are that the implementers are incompetent. It takes time to prove that it is the marketer that is unrealistic.” Yes, the Big 4 logic shines brightly here. Doing the same thing over and over, while expecting different results, is a good definition of insanity. So it’s not leadership’s fault for going insane, it’s the staff’s fault for not achieving the insane business plan numbers. And of course leadership’s first tendency is to blame everybody else, but themselves. Which is another symptom of insanity, paranoid schizophrenia, if I’m not mistaken. Nice. Let me also add that, while this may be true, it’s a shame that there is so little accountability in the Big 4, and that the ship’s course could be navigated so incorrectly for so long without appropriate consequences being meted out. On a ship, the captain can be removed for incompetence or insanity. In a corporation, there are shareholders and outside Directors who can replace failed leadership. Where is the equivalent function in partnership that is comprised of hundreds or thousands of “equals”?

6. “But, in some cases, the implementers find ways to be more efficient due to the pressure to do so… in which case it becomes a win and the marketer gets the credit.” A man’s reach should exceed his grasp, eh? Your logic is getting circular here, do you see that? Put down the koolaid and back away, now.

7. “Whine about it all you want — but this is a US culture, maybe a global business culture, thing. It has little to nothing to do with the B4.” Actually, no. It may not be solely endemic to the Big 4, but it is a manifestation of abysmal business acumen that has had cataclysmic effect on firm profitability and, as such, should be eliminated just like the Big 4 firms focus on eliminating any other risks to their bottom lines. And actually, nobody was whining about it in the first place. Strawman argument, much?

8. “It hasn’t changed in my lifetime or my father’s lifetime… not sure if it was ever any different. Maybe we should all go back to hunting and gathering – maybe that economy was more fair?” There is that word “fair” again. You use it, but nobody else is using it. (See strawman argument under “bad logic and weak rhetoric”.) And, no, I do not believe we should go back to hunting and gathering. But even you must see that the modern manifestation of the Big 4 sweatshop is about as close to classic feudalism — serf, vassal and nobility — as one could possibly find. If firm leadership had its way, staff would be indentured servants or worse. And actually, things have changed over time. Perhaps you’ve heard of collective bargaining? (Maybe not; it’s not a topic normally found in the CPA exam.)

9. Based on the foregoing points regarding the quality of your logic and abilty to make cogent arguments, I strongly recommend that you continue to post as “Anonymous” because you really, really need to protect your identity. From the ridicule of your co-workers, if nothing else.

Tenacious, several of the points you have made to address the delusional #288’s argument were taken right out of my mouth. Especially when you rebutted the argument that the implementers/staff should educate and push back (push back???) on the marketers/partners when in reality they are going to interpret it as “Basically you’re telling us our judgment and foresight stinks. How dare you? Well I hope you have enough foresight into what your next career opportunity holds because guess what? Your services are no longer needed”. #288, I would love to work where you work if your leadership is open to unreprimanded constructive feedback from their lower level staff. At the big four, a CLM like that could knock a senior manager out of the partner race easily.
As for Tenacious T, have you considered a career in regulatory oversight…the PCAOB perhaps. With the current lack of accountability you’ve highlighted, these firms need someone with some clear lens who sees things for what they are and is able to call them out.

@Tenacious, your points are great. One thing I missed in my comments @ 283 was that I wanted to ask who should take the responsibility of the big mess at DT now? Well, the partners blame it on the poor economy. I disagree and I stated my points @283. My thoughts is that senior partners, particularly those who were in the decision-making roles for the past 3-4 years should be held accountable for. Currently DT is firing many partners/directors and demoting some partners to directors. But wait, pretty much all of them are either new (1-3 years) partners or the ones on the bottom tiers (the partners level, not performance). Those partners/directors got thrown out not because they had audit quality issues or any performance issues. They got kicked out because they are paying the mistakes made by their senior partners for the past 4 years. We got to ask, where is the sense of partnership here (you call each other “partner”, right)? Those departing ones did not make any decision on the business model. They did not make any decision on the HR and marketing strategy. They did not make any decision on the pricing strategy. So who made these decisions then? This is insane when a company had such poor performance, and its senior management claimed that they had nothing to do with it. Imagine this happened to any other US corporations.

We all ask this every day: when will those so-called national /regional /service line /group / industry leaders get their “early retirement”? I understand that partner groups have their own evaluation and rating system. I also know majority of partners were rated 1 or 2 last year. Please!!! Where was the same “bell shape” standard as applied to the manager/ staff’s evaluation? As far as I know, DT did not make the plan last year, so where were all the 1 or 2 performers coming from? We are very curious how the performance of “leaders” were evaluated.

Finally, I want to response to @288 about his “marketer vs. implementer” theory. Be honest, I don’t really understand his points, but it seems that he refereed partners as “marketers”. Let me clarify here: partners are NOT marketers. Partners don’t know how to market or sell. A lot of people out there may have some misunderstanding about partners’ selling skills. A partner is trained to be a good auditor, but never to be a good salesperson. Most of their works are brought by laws and regulations. So by design, they don’t need to go out and look for new customers. Every day, they just sit in their offices and wait for opportunities to come. For example, if Company X is tired of their current auditor, they send out a RFP to other big 4s. Partners receive the request and have their marketing department to put together a nice proposal. From time to time, they may need to do an oral presentation. Of course, the most important part is to make sure their names are put on the proposal. If the proposal was accepted by Company X, the partners would take the full credit of this “exciting win”. Worth to mention, fighting to have your name to be put on these proposals is a pure political game, which directly determines the “Client Services” rating. Throughout years, I saw many many cases, some partners did not do anything, but somehow they had connections to make their names on new proposals, and they ended up claiming that they made millions of dollars for the firm.

And, this is the best part, people like that, became our “leaders”. Today, they are sitting in their offices and planning the next round of layoffs, demotion, early retirements….

“As for Tenacious T, have you considered a career in regulatory oversight…the PCAOB perhaps.”

No, that is not my Pick of Destiny. We could, all of us, point out many problems with SEC and PCAOB enforcement. The problems are not with the government employees (who are, for the most part, hardworking and knowledgeable people), the problems are with the politics surrounding authorization, appropriation and funding — see OMB and Congress under “root causes”. I would not want to play in that game, under the existing rules, no matter what my title or authority was.

But thanks for the nice thought.

Finally, here’s a link to a “news story” on the Big 4 that came to my attention. I highly recommend you follow the link.

Does anyone here personally or very directly know any partners who are demoted or forced to “early retirement”? If so, D allows those ex-partners to cash out their units with the price you paid or only current market prices?

In D, it takes 2/3 votes from all partners to ouster one particular partner. Therefore, it is all most impossible to really ‘firing” one. The partner demotion mentions with previous throughout this discussion may mean differently than regular employees’ layoffs.

It technically takes 2/3 vote to “fire” or “demote” a partner. However, it is impossible and never exercised. As I understand it, the partners are “shamed out.” It is similar to how managers, etc. gang up on a staff or others, take work away from them, make them feel like losers, etc so that will leave. With partners, the powers will take their units away (known as “bleeding them down”) until the partners make less money than a 1st year staff. If you think politics are ugly beneath the partner level, you should see it at the partner level. A** kissing and doing what you are told are extremely important. If you don’t line up, they essentially shoot you by diverting clients away from you and taking away your units.

A partner can not be “fired” but can be forced out, but that almost never happens – the partner just “resigns”. Units are not like shares of stock that have a market value per se, they represent the shares of the income pie for that year. When you are forced to “resign” from the partnership, you negotiate an exit package. The basis for the negotiations may be based on the number of units you have, the number of years with the firm. potential litigation to the firm, etc. Your net capital is paid out in installments.

in our office, they are starting to tone down the performance review process by giving more 3s & 4s. Even the solid performers who typically would be rated 1s or 2s, are not given a 3. I see more writing on the walls as consensus is aroudn the the corner. What a shame…..

aren’t there partners and leaders watching all this happen? if they take work away from someone and their utilization suddenly drops, don’t they investigate whats going on and take the responsible people to task? fire those who practice nepotism…this should be unacceptable in a professional services firm..i guess the people who need to watch law and order are asleep at the watch or the wheel…terrible state of affairs…

@302. You must never work for big 4. Things like that happen every day. You trust the partners and leaders? Ha ha… they are doing the same things to their peers every day. This is the real life at public accounting firms.

@292, I like your comments, with all the layoffs at DT, it is about time to “fire” some senior partners.

Greendotlife has more postings about Deloitte layoffs happening in April. Someone mentioned the layoffs being effected prior to Deloitte’s fiscal year end in May so that Deloitte can save on 401K matching costs. Anyone else aware of this?

@401K Savings When I used to be a Controller, before I ever started working at professional services firms, PIP stood for “profit improvement plan” (vs. performance improvement plan as it’s more commonly used these days.) The kind of move you’re describing is something that a small group of finance folks would think up in a room late at night and put on a list of potential action items. We’d estimate the impact from putting the action item into action, so senior management could prioritize and approve. You got promoted or kept your job (depending on how bad things really were) based on how many great ideas for squeezing savings out and maximizing profit from the most creative places you could come up with.

I heard a similar one over the weekend from someone at PwC:

“…although PwC has taken the stance that they won’t be laying anyone off, they are certainly reducing staff. A few in [my] office have been let go with “performance” noted as the issue (in fairness, some probably were underperformers), and others have been targeted based on rather flimsy cases put together by HR (citing arguments with seniors, utilization, etc, ). It seems rather evident that in this office at least the directive came from on high to reduce staff. In my opinion, the path PwC has taken is worse than that of the other firms…if they feel the need to reduce staff that’s their business, but at least admit it. Instead they take the stance that they will be the only one not to lay people off while steadily reducing headcount while sidestepping severance packages. Its simply disgusting that they let someone with four years experience go on February 27. His insurance benefits (and therefore those of his dependants) terminated end of the month, no severance given….”

Cutting off insurance benefits in current month and using performance as reason so no severance? Priceless.

fm, i am speechless. You should see the recruiters on the TaxTalent boards echoing the PwC “performance” BS. PwC and TaxTalent seem to be in bed together. Being laid off is bad enough. To have to deal with the “performance” BS and terminated benefits is even worse. There is one silver lining though. Thanks to Obama, individuals earning less than 250K can elect COBRA coverage at 35% of cost (i.e., a 65% discount) for 9 months. So poor PwC will still have to pay — LOL!

My staff showed me a presentation today that Deloitte AERS is projecting to have 25% growth in revenue within 2 years. Can someone, anyone, who knows Deloitte well, tell me how they came up a plan like this, and expect to achieve it under the current economy condition and with their 10% layoff?!!!

@283, I have to agree with you… are those leaders crazy? Other than greed and stupidity, what else they have?

The planning process is not based on anything other than the “safe” revenue projected for next year plus some “wild” guess for growth.

It’s Silly.

The planning process has always been silly. Local management has to always show some growth even when it is unrealistic to prove that they are effectively growing the practice and deserve the units they have. They tack on a percentage and send it to National for approval. National always pushes back for more, negotiations ensue with an agreement somewhere in the middle.

But guys, that just does not make sense to me at all. They want 25% growth, but at the same time, they are doing all these layoffs. Ok, you want to preserve the number of partners, fine, but what happen to their staff? Continue to fire them? If so, how could they archive the plan then?

By the end of day, who is responsible for the plan if it is not achievable?

I would agree with the post that mentioned Deloitte layoffs happening pre-end-of-year-review to save the company from paying out on 401k plans; I saw that coming, and it makes sense given the kind of morals the company’s proven itself to have. I haven’t seen it mentioned here yet, but several seniors and managers were laid off barely a week ago and more today.

I did not get Deloitte’s staffing strategies. Why didn’t they do the worst case estimations and have a deep cut once for all. Or simply they can make people feel vulnerable and people would leave by themselves, which even save D’ severances. I worked for one major company in early of 90s. They simply told 25% employees that they were with high risks of being layoffs and another 25% that they were under “protections” of company. However, as today, there is no “news” but people are “bleeding” every day, which would destroy the motivations for work and all loyalties to the company. It is obvious that D needs real leaderships who have some level of strategic thinking capacity.

321 – I think the complications is that no one knew, knows, or can predict what’s going to happen, i.e. no investment banks left. There’s also the issue of PR, with schools and current and potential clients listening and watching closely. That can also escalate into a “run on the firm,” where key people, whether sellers or deliverers, leave and clients and staff follow them.

Thanks 322 and I am the 321. However, that is the all the leadership to be. We are with very difficult economic and we need extraordinary leadership. There no body knows everything up-front. Therefore the vision and judgment come to the place. A good leader will come out the best strategy to lead the company through the difficulties. I do not potent to know the solution. But I am sure that “bleeding” (layoff small number everyday) is definitely not a best option, even the worst. It is obvious that most people left would worry their job more than doing client services. Employee would loss confidences to the company and their leadership. The bad words would come out such as with this blog…

FYI, Deloitte is now targeting their Tax Directors. When promoted, the Tax Directors who were told that they would be treated as part of the partner class, but have no actual equity in the firm. Now, they are just the highly paid one’s who are much easier to eliminate. (i.e., no 2/3 vote requirement). Laying off the Tax Directors gives the partners more job security, as many of these Tax Directors were the primary contacts on clients. With the Tax Directors gone, the partners can claim credit for the Tax Directors’ revenue for the year and justify their worth.

Deloitte is adept at this. They dump the Tax Directors in a bad economy and will just buy them back when the economy improves. Boycott this firm. Resist their employment offers and service offerings.

Let’s see Deloitte punish the one’s who made the bad forecasting, hiring, and management decisions. At Deloitte, those who control abuse. Hearing a bunch of partners cry about $900/unit values is pathetic. So sorry about your $500,000 plus take home this year, at the cost of the livelihoods of your dedicated staff who sold their lives to the firm.

On the bright side, it will be hard for Deloitte to convince future hires about being rewarded for working the crazy hours.

@236, the senior partners already read these blogs. Why do you think they are bleeding in the layoffs? When they conducted massive layoffs in August of 2008, people flocked to these blogs. Deloitte is just trying to continue the layoffs under the radar so as to not tarnish their precious reputation. Assuming that you have read all 326 postings here (and else where), I would conclude that they are failing miserably.

@328, you are probably right. This is sad, isn’t it? They learned things from this blog, but only used them to play their PR games. They never learned the lesson and took different approach to change the way they treat their employees…

@320, unfortunately, we are talking about a bunch of people who care about one thing — maximizing their returns — and will pursue such goal at all cost and at anyone’s expense. They pretend like they care (in meetings and other functions), but only to solicit information to help them pursue their end goal. They have no desire to change (as you put it) because any such change may jeopardize their goal.

Given what I have witnessed and read in this (and other blogs), I have come to the conclusion that it takes a “special” person to function in a partner role. Many of these people truly hate their jobs and have convinced themselves that the $$$ is worth it. Some have spending patterns (or wives and kids with spending patterns) that require such $$$ stream. They grew up (advanced) by screwing everyone over and convince themselves that it is everyone for themselves. However, what bugs me is that we are not talking about people in level playing fields. I equate it to an adult playing Monopoly with a child and still cheating to win. It is disgusting.

At the end of the day, when you and I put our heads on our pillow, we get a sound night of rest. The people who have sold their souls for $$$ likely have no peace. Many of them are just puppets forced to implement the layoffs, until one day, they find themselves being forced out.

I’ll say one thing about the bad economy. It is really test people’s characters. I no longer respect the public accounting firms and the services they provide. The word “partner” has an extremely negative connotation in my mind. When the economy rebounds, it will be interesting to see what happens to the public accounting firms — in particular, as someone put it, “Toilet and Douche.”

Hey partners, and all the rest of us – there is karma for bad behavior, and it’s coming back around a lot faster nowadays. I’ve seen 3 repeat clients, legit, in need of services, good source of revenue for partners, solvent, same management, walk away, outright or implicitly fire their firms. In at least 2 of these cases, a former employee from the firm was involved. I have a feeling this isn’t the only story that I or others will continue to witness.

323 – I think what’s going on has caught a lot of partners by surprise, especially since it’s been a decade of growth. Partners expect clients to pay their bills slowly, or dispute them, but not for clients to go bankrupt or liquidate, and for partners’ to have to stand in line with the other unsecured creditors. But I also definitely find the lack of disclosure and transparency disturbing. How shaky is the firms’ balance sheets, i.e. about the same or worse than some of their semi-solvent clients? How much of the financial pain are partners also absorbing into their own wallets?

“How shaky is the firms’ balance sheets, i.e. about the same or worse than some of their semi-solvent clients? How much of the financial pain are partners also absorbing into their own wallets?”

I’m not 100% absolutely sure of this but aren’t the partnerships actually run on a cash basis, and not an accrual basis? Maybe some but not all? I was always told it was collected cash that mattered, not engagement “revenue” — but that could have been just my firms.

With respect to your second question, it might be better expressed as “How much reduction in compensation are the partners experiencing?” Unless we get a few partners (or recently ex-partners) to tell us, I can’t see how we’ll know for sure. My gut feel is that there is some decrease in the number of units per partner (based on individual performance and perhaps market or practice performance), as well as some decrease in overall unit values (based on overall firm performance). So I’m guessing (and it’s only a guess) that the partners are feeling some pain — as always, some more than others. But I haven’t heard they’re having cash calls or anything like that. I having heard of partners trading in the Mercedes and BMWs for Ford Focuses (Foci?). I doubt it’s very painful. And of course, the silver lining would be that they’re going to be paying out less in income taxes! (See, I can spin just lke HR….)

Another question I’d like to see answered involves where the units go when partners are “demoted” or lose units based on their performance. It would not surprise me at all to learn that the “free” units are subsequently taken by the senior partners. In that way, when unit values fall, their individual take-home pay is protected because they have more units. But again, I’m simply speculating here without corroboration. Anybody with first-hand knowledge want to answer the questions?

FM – I think an interesting topic to unearth in connection with these Firms is why they feel the need “as a private company” to wrecklessely disregard GAAP when reporting their own income. Examine all the funky conventions/imputed interest/intercompany revenue etc. If one can’t even be trusted to do their own books in accordance with GAAP, why should the investing public have confidence in the “tone at the top” to be their advocate?

Anyone here would like to come out a wild estimation of the size of Deloitte. D had about 45K employees when the “layoffs” last year. So far, roughly 10% employees have been “cut” off. The situation should last to the end of last year (2010), even though the economy may bottom this year. Whether would that, another 10% to 20% cut from now to then by then (end of 2010), reasonable estimation? If so, we would see a 30K size of D.

@340, Yes, everyone is laying people off and it may not a big deal. However, we are discussing D’s layoff here since we have common interest and it would impact our life directly or indirectly. Most companies would do it openly with “big” announcements of number and timeline. Sometimes, the announced is more than actual cuts. But D has completely different tactics such as business as usual on the table and “bleeding” underneath. They think it could save their “images”, but truth would come up sooner or late. On top of that, it adds some much burden and stress to people still working for D. There is no free luches.

Its not the layoffs that people are protesting. Rather, it is the manner in which the layoffs have been conductef (with complete lack of integrity) that people are protesting. Did you see Salzberg’s BS about Deloitte hiring top talents despite other organizations laying off? This organization appears currupt all the way up to the top. Americas’ audit firms that are not protecting shareholders’ interests, but only their own pocket book – now at the expense of their workers whom they convinced that working 80 hour weeks for long periods of time is the norm and path to success? You don’t really believe that the partners do the work, do you? Even if they wanted to, they couldn’t bc they need to play the game and protect their interests.

With all due respect, please read all the posts and try to post something intelligent.

@342 – No one likes the manner in which layoffs are conducted. That’s because firms are basically saying “we have to cut people, and you’re the first to go (or you’re next in line),” which clearly means “you’re our least valuable human resource.” Audit partnerships are run like businesses rather than public servants, but so are 99% of businesses out there. The CEO isn’t going to take a pay cut to keep a few more staff on board unless he’s doing it solely for PR. And the Big 4 don’t need PR, they’ve got an oligopoly going.

The real issue is that auditors are SUPPOSED to be serving public interests, and they’re not. Let’s not pretend that auditing firms are terrible for laying people off in lean times. Sure, complain that they’re laying off more than necessary, complain about impossible budgets and forecasts, but be reasonable. You could be in the auto or mortgage industry right now. You’d be praying for a job as a CPA in the Big 4.

@340 – Sorry for 342, but you have to expect that a bit when blogs are open to anyone.

2. The CEO (Senior Leadership) isn’t going to take a pay cut to keep a few more staff on board.

3. The auditors are SUPPOSED to be serving the public interests, and they’re not.

You miss the mark in other areas:

1. You get laid off, which clearly means that ‘you’re our least valuable human resource.’ One of the main issues posted is that there does not seem to be any rhyme or reason as to who gets laid off. People have been laid off who have full pipelines and/or 100% forecasted utilization. Every one of those layoffs negatively impacts future revenue far more than it helps cut today’s expenses. How do such layoffs support the notion that the firms are “run like businesses”? If you mean “failing businesses” then we are in agreement. If you mean “well-run, prudent businesses” then we will have to disagree.

2. If you were in the auto or mortgage industry right now, you’d be praying for a job as a CPA in the Big 4. Maybe; maybe not. It’s not really an apples-to-apples comparison, is it? First of all, you already admitted that the Big 4 firms are an oligopoly; there are some benefits from the lowered competition, right? One of the expected benefits might well be higher job security. Second, the CPA requires extra education and experience, unlike (say) making or selling cars; so there is, or should be, some extra job security from that fact. Third, it is quite possible that there some are auto workers out there right now, praying for a massive early retirement severance package so they can enjoy their company-paid post retirement benefits–PRBs that are not available to Big 4 employees other than partners.

3. “Sorry for 342.” Troll baiting rating: 3/10. Try to do better next time. Failed snark is no way to go through life, son.

Seriously, the bottom line is that people would be far more comfortable with the situation, if they could see evidence of accountability and implementation of lessons learned at the senior levels of the firm.

the only thing I can say about deloitte is this place is full of craps. For people whom survived, most of them are already mentally and phycically impaired. I am still glad that I got laid off in March, I just can’t imagine that I would still be there kissing asses, and making lies. Every sinlge minute in D&T, I have to remind myself constantly, do not forget to kiss asses, from my own team to the client team. WTF!!!

D&T has a new compliance department establshed for checking the intergrity of the partners. Saying that this new position will last for 18 months, after that, the staff on the team will be let go. You want to audit the partners? Ha, is it too late, Toilet & Douche? What a loser…

I don’t think I have deleted any of your comments. I can see your IP address (Yes, I can.) and I do not see any deleted. If you’d like to explain or complain, please email me. fmckenna@mckennapartners.com

Thanks for your feedback on my opinion. Seriously (no sarcasm intended). I’d like to respond to your 3 points where I missed the mark:

1. You make 2 points here, I’ll address them seperately. First, there is always a rhyme or reason for the selection of who gets laid off. You just may not agree with the rhyme or reason. Obviously if it’s an illegal rhyme or reason (discrimination) then feel free to sue. If it isn’t (the partner’s golf buddies with the staff’s dad, so he stays while the more competent staff is fired) then pipe down. That stuff happens in the real world, not just the accounting world.

Second, just because someone is making the firm money doesn’t mean you don’t cut them in lean times. What if someone is fully utilized during busy season, but has several weeks unassigned during the summer? If an office has multiple staff like that, who are all unassigned together for large chunks of non-busy-season, then the firm has ways of cutting costs while not losing as much revenue. They can hire temps for busy times, they can make remaining staff pick up the slack, etc. Sure they take a small hit during busy season if they can’t charge as much, but then they don’t have to pay for downtime from the people they fired. If you think that auditors are the only ones who have a “busy season” and have to deal with cutting costs by removing revenue-reducing staff, you’ve clearly never been snowboarding.

2. Now with this one, you’re just being contrary because that’s your nature. Your first two points in this paragraph reinforce what I said that if you were in the auto industry, you’d kill to be a CPA instead. Your last point about people praying for early retirement… sure, but the vast majority are praying McDonald’s calls back so they can have a job and get out of the homeless shelter.

3. Whatever. I am honestly sorry to 340 that he\she can’t come here and freely express him\herself without being lambasted. Just because everyone around you is complaining doesn’t mean if you don’t complain you’re an idiot. Maybe everyone else is just being a bunch of whiners. It’s a down economy, people. Grow up.

I don’t agree that there is always a reason for choosing who goes and who stays. At least, none of my partners were aware of anything except for an arbitrary decision from above. Sometimes it was a flat percentage (i.e., “cut 10 percent of the heads”) and sometimes it was something arbitrary like (“cut everybody with YTD utilization below 40%, even if the people laid off have been on firm-approved internal projects or maternity leave or whatever”). If you call that a reason, well I guess you’re right. But can we agree that it’s not much of one? Certainly not a reason worthy of the Big 4, advisors to Fortune 500 companies & such.

Seriously, if you are running a for-profit business and you eliminate an asset that generates more revenue than cost (i.e., a profit-generating asset) you are making a mistake in judgment. Can we not agree on that point, even if we perhaps disagree on the ostensible rationale for doing eliminating that asset?

I didn’t mean that the directive from the top is always “fire the people that are underperforming” rather than the examples you gave. But if they get “cut 10% of the heads” then there is a certain leeway for the partners to decide who goes. I agree that there is often, both in and out of auditing, poor decisions made by top management when it comes to layoffs. I just think the outcry against the Big 4 in particular is a bit unfair. These things happen across industries, perhaps moreso in the oligopoly environment of auditing, but that’s the risk of working for a huge company.

As far as reducing revenue-producing staff goes, that’s a tough call. If you’re projecting to have fewer clients (or fewer billable hours, whatever the case may be) next year than this year, there may be room for layoffs. Yes, you’re removing your source of revenue by firing someone, but you’re also cutting your biggest costs during lean times. If you’re Big 4 and you start picking up more clients, it’s the easiest thing in the world to go out and find eager recruits. They know that they can dick around their staff (pardon my french) because of the resume-building power of “Big 4.” As long as they find someone, anyone, to fill in for the laid-off employees during busy times, they won’t miss a beat.

What they need to do is eliminate as much overhead as possible. But that’s where top management (ie. a main source of overhead) isn’t going to go. Not in the Big 4, and not in private practice.

Anyways, I feel like I’m way off topic now. I do agree that all service-based companies need to exercise extreme caution when firing their revenue-producing staff.

The only solution I think that will ultimately fix the problem with auditing (and I think the Big 4 are a symptom, not the source of the problem) is (and I shudder at the thought) government involvement. If the auditors are going to be run like companies, then they’re not looking out for the public interests first. If they’re not looking out for the public, why are they auditing? But opening the government-as-auditors is a completely different Pandora’s box. I’d love to chat about that sometime, but I don’t think this is the appropriate forum for it.

TT, it’s refreshing to hear other sane thoughts about this screwed up situation. Cheers.

I thoroughly appreciate an educated and civil discussion amongst individuals of different viewpoints. Thank you both for bringing some thoughtfulness to a discussion that at times has gotten immature and irrational due to the emotions involved with the topic.

If you do not mind me chiming in I believe you both make good (and bad) points. Nonetheless, I will voice my own opinions relative to the points the two of you have discussed/debated already.

1. For my first point I have to agree with SoCalPizza. In my experience throughout this layoff process there is always a rhym or reason for the individuals who are selected to be dismissed. These reasons do not necessarily reflect performance or capabilities, but my be driven by external factors beyond the control of the individual. I believe it is situations such as this that really fuel the emotional fire that has angered/frustrated so many. For example, there may be individuals who are cut due to shortfalls in performance or not having passed the CPA exam. For these individuals it seems that getting cut is not only logical from the firm’s perspective, but also somewhat deserved based on the expectations of the level of work to be performed coming into a Big 4 atmosphere. On the otherhand (I believe SoCalPizza touched on this), others have been cut for reasons such as lack of client commitments, overstaffing at a certain level, or even for not having the right reputation/connections within the firm. While these reasons are not as justified for making cuts they do play into the overall consideration once you have trimmed down the individuals in the first category mentioned above.

2. I think we are seeing a transition in the Big 4 to more of a cut-throat competition amongst the individuals in these firms to jockey for position to the head of their class. I know in my peer group it seems everyone tries to get a read on where they sit relative to others at our level. Part of this is due to the recent cuts, but I think it is an overall shift in the competitive atmosphere amongst peers. I think we will continue to see this develop the longer layoffs and cuts remain a possibility.

3. In terms of TT’s point about eliminating an asset that generates more revenue than cost, I completely agree with the premise of your argument here. However, I will say from the firm’s perspective I can see why they would make such a cut. Imagine that during busy season you have an engagement team of 5 individuals working on a job putting in 50 hours each. While all 5 maybe profit-generating, what if we scaled the team back to four. We bump up each person’s hourly workload closer to 55-60 and tack on one extra week to the engagement if necessary for one or two of the individual. Then the same amount of work is getting done for the same price with lower costs thus increasing the margin. Is this fair to the individual who got cut? Maybe not. Is this fair to the other individuals there to pick up the slack? Probably not. Do the partners care at this point? No. I have seen this trend occurring more and more in my local office as well as the “informal field promotion” tactic which places more responsibility on less experienced staff in order to fulfill the duties that are left behind by the large cut of Seniors.

I am not sure if you are both D&T employees, alumni, etc. But this is the perspective of someone who has been affected by the layoffs, not by losing my job, but by the additional workload and responsiblities passed along. While I do not agree with the principles on which the firm bases some of the decisions, I can overall at least see where the firm is coming from with the decisions they make.

In my office, I will say the partners were very thorough in supporting the one individual who was let go and was here on a work VISA. They were working with him to ensure both that he was allowed to stay in the country and also that he was placed in a new position quickly. Just an FYI.

1. NYPizza I would get. ChicagoPizza I would get. But SocalPizza? I have trouble with that concept. What, does it have avocado and sprouts?

2. You both make good, thoughtful posts. If I hadn’t personally witnessed more than one example to the contrary, I would simply accept what you say. The problem is, I know too many folks who were laid off with 100% forecasted utilization (yeah, I know, forecasted utilization and $3.95 buys you a Starbucks, but still, that’s the firm-mandated planning tool). I know one poor guy who just landed a $3.5 million engagement (on his own, without partner assistance) who was laid off the week before the job was to start. Needless to say, the client pulled the project. His annual salary & fringes were dramatically less than $3.5 million. Perhaps we can disagree on whether these examples are the exceptions or the rule, but so long as I know of them, I have a really hard time thinking that the firms are doing the businesslike, prudent or rational thing.

3. My belief is that the partners are making decisions based on this year’s compensation, without regard to the future of the firm (and their future partners). They will do whatever it takes to maximize this year’s income and, if that seriously weakens the firm in the long-run, then so be it. It’s like throwing children from the sleigh to the wolves, or whatever simile works for you. It ain’t pretty, and it ain’t good business. But it’s sadly human nature, the kind of “tone at the top” that would (or should) set off warning signs in audits.

4. ARM, you make a very good point about laying-off heads today and easily sucking in new suckers (um, I mean associates) next year. But think about the effect those decisions will have on audit quality. There are impacts to today’s audits from associates doing the work of seniors, plus impacts to future audits, stemming from untrained suckers (um, resources) coming in without adequate supervision. These are the people who are the firm’s front line of audit quality. Think about the cost to the partnership of one failed audit (or alleged-to-have-failed audit). Again, I would argue that the business case clearly says keep the bodies, focus on doing MORE (quality) work with reduced margins, and try to avoid any more settlements and the resulting increases to practice protection costs. Litigation avoidance is not a cost generating activity, it’s a profit generating activity. Or so we used to tell our clients for a fee, but readers of this blog get such advice for free!

5. ARM I agree with you about the nature of the partnership changing, with collaboration and mutual assistance being replaced by self-dealing and back-stabbing. Again, human nature. But sad, sad, sad. The Big 4 were once the sine qua non of professionalism, and now what are they? A place where many (but not all) of the drowning partners try to see how many pairs of shoulders they can stand on, while they wait for rescue from the shipwreck they largely created for themselves.

A silver lining in the gloom? Experience. A year in the Big 4 is like 3 years in industry, in terms of learning and exposure to a broad range of issues. Despite my many issues with the firms, I would still recommend that a college graduate sign up — but get out (or “monetize the experience” as somebody else once posted) by the time one makes manager.

TT, I think your comment #4 was meant for me, not ARM. Either way, when I said they can always get new suckers each year, I wasn’t condoning it (for many of the reasons you mentioned). I’m not defending the Big 4 by saying they’re making smart moves, I’m only defending them inasmuch as they are acting like (nearly) every other top management is once trouble comes. Of course they’re worried about this year’s profits. That’s the only thing they can control right now. Who knows if there will even be a Big 4 in a year? I want my paycheck now!

That’s really all I have to add. We seem to be in agreement on most of the big issues. Either of you care to chime in on government-as-auditors?

As far as “SocalPizza” goes, it was a failed attempt a while ago a being Socal CP-iz-A (as in… “for rizzle my nizzle”). It ended up being SocalCPizA, which looks a lot like SocalPizza, which is what everyone called me. So now that’s what I call me too. Cheers.

#355 – unfortunately that doesn’t sound like my experience when I was chopped – I asked about visa status etc and was told by HR “you’d better call a lawyer”. I tried calling the lawyers I’d been using through DT and got no response. When I did eventually hear from them they said they had been too busy as there were too many people in the same boat. Anyway, by then I was no longer a DT person so they couldn’t help me.

“I just think the outcry against the Big 4 in particular is a bit unfair. ” – This a blog on Big 4 – what do you expect? an outcry on the media industry? you are losing it, pal. i cant figure out which side of the fence you are in – flip flopping.

Like I said before, just because everyone’s whining doesn’t mean they’re right. Like it or not, the Big 4 partners are acting pretty much exactly how you would act in the same situation. They’re also acting how 99% of top management teams act under similar circumstances. Whine all you want, but don’t get mad at me when I try to give a little perspective.

Little perspective of what? You said that “I’m not defending the Big 4 by saying they’re making smart moves, I’m only defending them in as much as they are acting like (nearly) every other top management is once trouble comes” and “They’re also acting how 99% of top management teams act under similar circumstances”. My friend, where did you collect these data to support such claim? Have you been a senior management on every single fortune 500 companies or do you know all of them? For most of your points above, there are nothing new to me because I have heard again and again from our “leaders”. It is clear that your perspective = the big4 partners’ perspective. Why do we have to get your perspective while we are listening the same stuff at the firms every day. Your points are one sided, and only sound good on paper. In reality, it is all different story. One year ago, when I asked one of our partners why we hired so many people, he gave me a long lesson how the hiring could help the growth for the firm. Now, I asked him why we laid off so many pople, he gave me another lesion how the layoffs could make us “:stronger”. It is same stuff, as you stated in your comments, how they “rationalize” their actions for supporting the business model as if they never made any mistake.

Please don’t accuse the readers here of being “whining”, “irrational” or “immature”. This is the Internet, and this is an open forum. A lot of readers here lost their jobs because of the poor decisions made by the big4 partners. They are angry and frustrated. They are here to vent their anger and look for a different kind of “perspective” as the ones you have.

Here is also what you said “Let’s not pretend that auditing firms are terrible for laying people off in lean times. Sure, complain that they’re laying off more than necessary, complain about impossible budgets and forecasts, but be reasonable.” Again, be reasonable of what? Did they really lay off more than necessary? Did they really make impossible budget and forecast? You answers could be NO and NO, but don’t tell the others who disagree with you as being not reasonable. At least we never pretend to know how 99% of top management would do at this situation…

@TT – your point on replacing people with new hires. Regardless of the economy it is a value question for management to make. If person A is hired and they are an average performer or below average but not horrid, well person A will get carried along in the good years. In reality, Person A should have been let go in year 1, but that person now thinks they are a good performer. So, bad times come along. The supply increases and there is real choice for employers to seek out the best people — college gras or experienced hires. So Person B comes along. Let’s say person B has experience and seems promising. Why not let person A go and go for person B as it looks like you swap out an average or below average performer for a likely better performer at the same cost. Now take the argument further — person B is a college grad and would require training, but shows real promise and potential. Of course you are in slow times, so there is time to train this person. Why not take the chance — replace person A with the colelge grad… take the slow time to train this person, and manage to develop a better person and save costs in the short term.

It isn’t personal. It is the law of supply and demand. Why throw good money after bad when there are alternatives.

Now if you are contenting that the lay-offs are all top performers… then the logic I propose does not hold. And the real problem is that assessment of who are the top performers and poor performers is in the eyes of the person assessing. Talk to 5 people in your practice and you will get 5 totally different lists of top performers.

#354 – Don’t feel you can truly relate to those who have been let go under such difficult circumstances since you still have a job. Once you’re impacted by the lay offs, please pop back and update us on your thoughts at that time.

363 – What’s the value for the shareholders? An new experienced hire, or a college hire, brings a new perspective and set of eyes to an audit. However, what’s potentially lost is relationships with clients and/or client staff, particular industry and/or client nuances, knowing how or what kind of risk areas to audit.

I really only have a few fundamental points underlying my perspective; the rest is mostly window-dressing.

1. The firms misled staff at all levels, by asking them to put their trust (as well as their lives) into the partnerships. The staff has been asked to accept that the partners and senior leadership know what’s best for them, both in the long-term and short-term. We now know that has been an “inaccuracy” bordering, perhaps, on “fraud in the inducement.”

2. The firms rationalize most of their strategic and tactical decisions by claiming they are simply running the firms like a “for-profit business”. We now know that has been an “inaccuracy” bordering, perhaps, on delusion. Fiscal planning and budgeting have been of an accuracy that no rational business would permit; decisions are made for the short-term interest of a few as opposed to the long-term interests of the firm — or even the overall interest of the partnership (vs. leadership). Profit-generating folks are laid-off while other folks with low utilization or sales metrics retain their jobs. And no, it’s not personal. But it’s not prudent or based on solid judgment either.

3. There is a shocking lack of accountability at the senior leadership levels of the firms. Many recent leadership decisions look arbitrary or capricious; at a minimum they seem designed to shore-up top-level compensation (and not incidentally leadership positions) rather than being well-executed decisions made in line with a strategic plan to ride out the current situation. Many recent leadership decisions look from the outside like “panic”. Panic at potentially being held accountable for past decision-making, is my guess. Those partners rake-in double digit millions each year like clockwork … where is the risk that justifies such astounding take-home? I know how a failed CEO gets replaced in a Fortune 500 company. I know how a sole proprietor folds his tent. But I am not aware of how senior firm leadership is or can be held accountable for its decisions. They all seem to either retire on time or else die at their desks.

@363
What if you were rated as a great performer during your first couple years, asked for constructive feedback because you knew you had flaws in spite of your rating, but never were given constructive feedback, and therefore didn’t show big strides in improvement until a couple weeks until being laid off (and it was too late) when finally receiving constructive feedback?

Yes, I will agree it’s a value question. Hopefully it can be agreed that some people get screwed.

Article cut and pasted below from Tax Analyst regarding DT’s Audit Weaknesses. Is anyone really surprised that the PCAOB would uncover such weaknesses?

Date: Apr. 22, 2009

A recent Public Company Accounting Oversight Board inspection of auditor activities revealed that Deloitte & Touche LLP failed to identify a client’s departure from U.S. income tax accounting principles, while a smaller accounting firm didn’t properly test tax-related audit evidence.

A recent Public Company Accounting Oversight Board inspection of auditor activities revealed that Deloitte & Touche LLP failed to identify a client’s departure from U.S. income tax accounting principles, while a smaller accounting firm didn’t properly test tax-related audit evidence.

In an inspection report released April 21, PCAOB said Deloitte failed to indicate that a corporate client had violated Financial Accounting Standard No. 109, “Accounting for Income Taxes,” in one of the audits reviewed by the board’s inspection team.

Specifically, the client improperly recorded a deferred tax asset for goodwill when no differences existed between its tax and book bases, the PCAOB said, adding that the company restated its financial results because of the tax accounting error. This departure from generally accepted accounting principles should have been identified and addressed before Deloitte issued its audit report, the board said.

According to PCAOB, the inspection team reviewed certain high-risk areas Deloitte evaluated in its auditing process, including revenue, income taxes, fair value, financial instruments, and fraud consideration. During the inspection, the team reviewed the auditor’s workpapers and interviewed the firm’s audit engagement staff about those issues, the board said.

PCAOB also found that Deloitte failed to identify a material weakness in another client’s internal controls over its accounts receivable reserve. Another review showed that Deloitte failed to sufficiently evaluate the reasonableness of a client’s fair value estimates of some illiquid securities, the board said.

In a letter responding to the PCAOB’s inspection, Deloitte said it considered AU Section 561 (AU 561), “Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report,” when reviewing the client’s departure from GAAP, and said the client reflected the appropriate accounting correction in its next periodic financial filing. Deloitte said it also considered AU 561 when reviewing the material weakness cited by PCAOB and that the client subsequently revised the management’s assessment of those internal controls over financial reporting.

A PCAOB spokeswoman told Tax Analysts that the board could not comment on whether Deloitte had provided a satisfactory response to the board’s initial report of audit failures. The spokeswoman said PCAOB considers the inspection reports to “speak for themselves.”

A smaller auditing firm was also cited for tax-related audit failures in a separate PCAOB inspection report published April 21 on the board’s Web site. In the report, the board said that that Houston-based auditor Malone & Bailey PC failed to obtain sufficient evidence to support its audit opinion concerning a client’s use of an outside specialist to value a possible impairment of the company’s oil and gas reserves representing half of the company’s annual net loss. PCAOB said there was no evidence in Malone & Bailey’s audit documentation proving that the firm had tested the underlying data the company had provided to the specialist, such as year-end natural gas prices, ad valorem taxes, severance taxes, and capital costs.

According to its written response, Malone & Bailey disagreed with the PCAOB’s claims that the firm performed inadequate auditing procedures, but it agreed with the board’s assertion that the firm’s overall audit documentation needed improvement. “In some cases we added additional documentation and in others, we decided that none were needed,” Malone & Bailey said. The firm added, however, that there were no changes made to its overall audit conclusions or to any of its audit reports.

@368 — clearly some people get screwed. Bottomline, a small group of people make the decision based on their perspectives and their opinions. They may ask for input from others — butthe most that can do is help form their opinion. On top of that — they have to barter amongst themselves… each partner defending that they have the right team. Sometimes a person gets offered up as a peace offering. Whether @TT believes it or not — there is a rhyme or reason to the decisions (clearly not his/her rhymes and reasons)… but the decision making process isn’t perfect. My experience — in my practice good decisions were made. In my experience in the past when I was laid off elsewhere — they also made the right decision — even given that I was a top performer (as per them).

@TT/367 — ANYONE who ever believes that a superior telling them to trust them means “turn your life over to me and I’ll take care of you” is an outright IDIOT. Leadership’s job is to watch out for the business and as long as the employee’s goals are aligned with the firm’s goals then the partner will take care of the employee as a side effect of taking care of the business. I have never in my life (and I am old) heard a manager, or senior person in leadership indicate that their job and goal is to take care of you and just trust me. As for short term/long term — business is shortsighted and always has been — find a way to solve that and I will listen.

Where some are misled is in getting adequate or very positive feedback that is unwarranted (e.g., they are told they are performing well when they are not). What @368 described does happen… not because the managers/partner want to screw you over, but more because they do not like delivering negative feedback. Poor written reviews are rare — managers are taught to be constructive and encouraged not to be inflammatory (for legal reasons it has to be this way). But verbally there is usually more willingness to give the feedback points – but it is a hard thing to do and many managers avoid it. At the B4, many managers are very young people who rarely have the emotional maturity to give proper feedback. Sometimes staff make it hard to deliver the negative feedback. Defensiveness, finger pointing, anger, and not listening are some behaviors that make it hard for managers to even attempt to give the feedback. Not saying @368 exhibited any of those traits — but I recommend to anyone, be open to feedback and constructive criticism… if you are, you will get good coaching and you can decide which parts of it to listen to and and which parts to dismiss.

I wrote @368. I actually gave myself a self review that was mid-range and sent it to my senior (as a staff after a few months of work). I had some wording in there saying what I had done well and what I needed to work on, very constructive. My senior basically said to go a little easier on myself and to give myself a bit of a better ranking because I was better than how I ranked myself initially. He sent the form back for me to adjust it to what he suggested. Because I had only been there a few months I thought, “okay, maybe I’m not familiar with how the rankings go, what numbers people usually fall around, etc.”. I changed it, then he basically gave no comments on what I even suggested I can improve. If I was being constructive myself, I can’t see it being any easier for the senior to do that too.

@372 — sounds like you have a poor senior who has no idea how to mentor people. I am not D&T so I don’t understand the numbers either. But it sounds like you did all the right things. It is important to that you be self aware — not so much for others, but it will help you in the long run. My experience is that people who haven’t been around that long usually fall in the middle of the pack simply because there isn’t enough information to rate them otherwise. It is also my experience that overrating yourself does nothing for you — makes people stop listening to you. So i think your seniors advise was bad. The place I believe you should oversell yourself is in telling people what you are capable of doing in order to get on their engagement. Be confident that you can do the job in that case.

How in the world is a person with two-three years experience who was probably not mentored well him/herself supposed to learn how to be a good mentor to someone only a few years younger? The process is bankrupt. Senior managers and partners are not spending enough time with staff and that is affecting morale, quality, and professional development. Maybe the companies/government agencies that used to get these staff after a few years and consider them trained ought to take more notice!

@fm — I agree that the seniors have no experience in coaching and mentoring. In fact I go farther – the B4 promote people too quickly. There are things one must live through in order to learn how it works. I said it was a poor senior — that doesn’t mean that it is the seniors fault they are poor. There are more mature seniors and less and so forth. I have seniors that are i ntheir 40s, for example. They have many years of diverse experiences. So why do you think a senior only has two-three years of experience. I don’t like the idea of promotion based on one’s tenure as the B4 does – but if that is the case — then no managers until they have 10 years of experience and are at least 35 years old.

I haven’t seen anyone post about the region-wide message that a regional managing partner at uncle D left for all “colleagues” (yeah, right) around a month ago at the start of the year-end eval process so I thought of adding it to the posts here…

Frankly, I was a bit surprised that legal would have cleared that voicemail (or may be they were never consulted?). Basically, the partner said that given the way the firm has done over the year, leadership’s expectation (direct quote from the voicemail) was that the majority of the people will be rated 3 (i.e., meeting expectations) and that the number of people rated 1 (superstars) or 2 (exceeding expectations) would be much less than the previous years.
I don’t get how the firm’s overall performance can be correlated to an individual’s performance…sure in theory if everyone or a majority of people don’t perform then the whole firm suffers…but given where things stand where teams have lost individuals and the ones remaining in the audit rooms are being asked to carry more and more of the workload….how can that be just meeting expectations..or is it that the expectation-o-meter has been turned to “super crazy” level? Is it just me or am I missing something?

Can others at D comment on this? I got the impression that this message was intended to let people (both feedback providers and receivers) know what the firm’s leadership was expecting from the review process.

To those who think that group think cannot be imposed or managers, partners, etc. do not gang-up against individuals to pave the way for their ouster…think again…it’s happening…as unreal as it may sound..it’s happening.

Oh and a week or two after the voicemail, there were webcasts conducted by HR to “help” seniors and above in giving feedback. At the end of the webcasts, I felt that the overall tone of the session was tilted towards how to fish out someone’s mistakes (e.g., does someone not raise his/her hand to volunteer their help, is someone consistently late getting in in the morning, call HR if you have any issues – we can guide you, etc.). There was a lot of negativity in the tone…..they even said that if you don’t give some one deserving negative feedback such feedback and there’s a subsequent lawsuit, the feedback scorecards could be used against the firm so go ahead and give them the negative feedback that they deserve. It just felt like that they were encouraging feedback providers to give negative feedback……

FM, any idea if this kind of “expectation” setting and “help” is legal? Any lawyers on this thread that can comment?

P.S. I saved the voicemail…you never know where it may be come handy…..

“I have seniors that are i ntheir 40s, for example…” You work somewhere where they hired experienced people as audit entry level or seniors? I’m incredulous. Please do tell more. Here or to me directly. fmckenna@mckennapartners.com

“Basically, the partner said that given the way the firm has done over the year, leadership’s expectation (direct quote from the voicemail) was that the majority of the people will be rated 3 (i.e., meeting expectations) and that the number of people rated 1 (superstars) or 2 (exceeding expectations) would be much less than the previous years.”

Have you realized yet? The process is not about your performance, it’s about the money (for raises and bonuses) and about managing legal liability. This voice mails seems incredibly stupid and unnecessary. He’s ruined the illusion.

@378 — that is a sad thing. The way it should work is that the rating is the rating… you can be a superstar in a bad year. The issue then is that even if you got a superstar rating you may not get a good raise/bonus. The ratings and performance feedback should be independent of the raise/bonus decisions… but the ratings are input to the raise/bonus decisions. When there is lees in the pot to dole out — then a superstar rating isn’t as valuable as in a year when there is more in the pot. It can and is that way in other places.

@378. I am at D, and totally with you. I posted many comments relating to the DT rating system. I want to say it again: the rating system is tied directly to salary increase for the following year. For example, 1 rated would get 8% raise, 2 would get 6%, 3 would get 4% and 4 will get no raise. The whole purpose of an evaluation meeting is to make sure that the total amount of the raise = to firm’s budget. It is all about the money…

So, don’t be too serious about the review process. If you need constructive feedbacks, the partners or managers you worked with could communicate them to you directly. There is NO NEED for a stupid evaluation meeting like this. Think about this, why would partners have a problem to rate all their staff 1 or 2 if this wasn’t about money…? The evaluation meeting is just a show, and you are just a number.

Also, keep in mind that DT is also doing this in preparation of next round layoff. The firm is very desperate, and they look for every opportunity to get rid of people. One thing they are doing is to push as many people as possible to 3 or 4. If you get a 4, they could fire you without the severance. So in order to protect yourself, speak to your manager or counselor and make sure they will present you (in the evaluation meeting) at least as a high end 3. The point is that, for all DT employees, by the end of day, are just a number (sorry that i say this again and again). If they intend to lay off 50 people in your group, and there are only ten 4s, they would go up to look for the 3s.. You wont be safe unless you are considered as high end 3.

My ultimate advice for you is to find another job. DT is just a very bad company to work for nowadays. Good luck..

@FM. I’ve also met a person who I’d guess was in her 40’s who was hired into an entry level position in audit. Not sure if she’s still with the firm but she at least stuck around for 1 or 2 years as senior. While the overwhelming majority of new hires are fresh out of college its not unusual for people to enter into audit as a second career (I don’t think I’d do it but to each his/her own). It offers you a quick route to a CPA and some good resume experience.

@FM. We’ve also hired some experienced hires at the entry level. As a general rule, they have performed abysmally and have had limited degrees of work ethic. But, the dirty little secret is for the first few years of auditing, you really do not need that much brain power. Any even mediocre accounting graduate can do Big4 audit for a couple of years and survive.

# 384 – Nick Tommasino’s (Chairman/CEO) latest AERS weekly included these facts. Deloitte isn’t doing as bad as you think. It’s more the “fear of the unkknown being worse than the fear of the known” because Firm communication has been nonexistant relative to layoffs. Everyone’s hurting my friend.

For 2009 first quarter analysis of the largest six accontunting firms, the Attest Channel and Fortress Deloitte efforts:

1) Positioned Deloitte as the leader of public company audit wins, registering the most public company wins (13), the most net wins (5) and the most net audit fees won.

2) Recognized Deloitte as the only one of the six firms with a positive net client win rate & positive net fees won, winning both client & audit fee market share from all major compeitors.

There are some reports that Deloitte is planning to sell the DC. Is it only a rumor or there are come solid facts to support it? Thanks. However, it looks like that all Big 4 are exiting from the Consulting Services.

378/384 – totally agree with you. At D, HR have a predefined % of people who will be rated as 1 going into an eval meeting. A few years ago, when things started slowing, they stopped pretending that there was no forced ranking. If at the end, too many 1s are proposed and not enough 4s, those on the cusp will be “reviewed”. Ratings are done purely to meet a curve. And thankfully I have not been involved in the current round, where the end ratings will surely dictate who is next for the chop. I hate to think how those meetings will go. Individual performance doesn’t really matter that much, it’s all about your position on the curve (and who likes you!). You can have great scorecards all with the top possible ratings / reviews and end up rated as a 1,2 or 3 (or even a 4?). Makes you feel good doesn’t it?

387: Interesting – if the net fees are increasing, I assume they will make up for the drop in headcount by just dropping the work down to the next most junior level to do it. Good for quality / risk management then.

@FM: I have seen cases where significantly experienced hires have come in as seniors or even managers and my general experience was not good. It was not all to do with the quality of those people – but more down to unrealistic expectations as a result of what they were told at interview. A combination of them being told rosy stories of the actual work (promises about “sexy” consulting work v the reality of day to day audit/SOX work), as well as unrealistic and unenforceable promises from individuals doing the interviews about future promotions i.e. we’ll bring you in at X level and then promote you soon. Ha, good luck with that at the next promotion round. Many of those people left, for good reason.

“Nick Tommasino’s (Chairman/CEO) latest AERS weekly included these facts. Deloitte isn’t doing as bad as you think.” That must be comforting to those recently sold-out, I mean “layed off”. So things were not so bad afterall hmmnn – does that mean that D took full advantage of the U.S. economic situation i.e. “everybody is doing it”? Oh and coincientally, the BP acquisition was just too good a deal to pass up and it was not financed in any way through the cost savings arising from selling out loyal employees. Yeah right.

The big firms are schemes….partners (aka sales people) sell the work and 0-3 year people do the work. Whether the people the client is paying for actually have any experience (let alone quality experience) is completely irrelevant. And clients that use Big 4 firms are stuck since its the same way at all of them. It’s a pyramid scheme that will eventually crush under its own weight as sales people’s integrity is compromised and the worker bee’s are too ignorant to detect issues.

@378, nothing DT does is surprising. With YE evals, more layoffs are coming. The real question is whether DT will pay any (or less) severance, if they can substantiate that the layoffs are “performance related.”

@390, selling out is the name of the game, especially if it means more goodies for those left.

@391 – You’re naive if you honestly believe the Big 4 will “eventually crush under its own weight.” They crush staff, they don’t get crushed. I swear… it’s like there’s an entire generation who’ve seen too many fairy tales. There will be a Big (3-8) for the next 50 years. And probably the next 50 after that. Deal with it.

Big 3-8 for the next 50 years? Highly doubtful. Auditing will probably be completely computerized by then. Unless we have a global war that significantly sets the world back technologically, software companies should be able to develop products that will completely decimate the cash cow market auditing companies currently enjoy.

You are right. Auditing will be completely automated in the next 50 years, right after computers become self aware and take over the world.

Actually what is more likely is that there is a shift in the way things are audited. As the use of technology in business & accounting continues to increase, the importance of IT audit will also increase.

@387—I am completely confused. Whether does it mean there are no financial issues to Deloitte? Or D is even doing better than last year? If so, where did those layoffs come from? If D wants to save some money or “clean house” by taking advantages of the economic situation, they can do much better than what they did and doing now. D is paying big prices to save the dollars if they can eventually. The prices include large amount of severance pays, loosing very experienced leaders/employees, destroying remaining employee’s loyalties, and reducing productivities. In a couple of years, D may need to hire some of them back by paying staffing fees, sign on bonus and initial training and learning curves. Another big price is the bad publicity which D always desperately to avoid. Put everything together, I can’t see d can really save anything by playing the “layoff” game as last 10 months. Either I am totally lost or something deeper there which I can’t see.

Reference is made to the importance of employee moral (ha!) Too bad someone can’t post a link to this site. I am impressed, however, by DT’s ability to continue to maintain a straight face when spewing its propoganda and blantant lies.

The Deloitte webcasts contain quite a few sessions on managing costs (i.e., layoff your employees) in this economy.

If you were the CEO of a company, and read all 396 posts on this blog (or even 10), would you hire DT to give you advice? DT stands for what NOT to do.

FYI, the stealth layoff bleeds are still continuing. Another strategy is to “transfer” someone to a different office under the pretense of potential opportunities and then, lay them off a few months later. Once the person leaves town, it removes the otherwise stinch that would remain in the current market place upon layoff. The person can complain about DT in the new town, but chances are, no one will really know or care about this person, because the person has not had sufficient time to develop relationships with clients, peers, and supervisors. How much do you think that Uncle D charges for this advice?

Anyone know whether DT is still trying to sell its “Mass Career Customization” consulting strategy these days? Perhaps they are “customizing” individual careers (in the masses – oh, what a contradiction) by simply booting people and “encouraging” people to find better opportunities outside of Deloitte.

Francine, rumor is that Deloitte may sell its consulting arm, particularly since Salzberg did not deny this possibility when asked. Isn’t this strange, given that Deloitte is trying to buy Bearingpoint? With the current credit crunch, where is Deloitte getting the cash to buy Bearingpoint and build “Deloitte University” in Westlake, Texas? Surely, it wasn’t TARP money. Finally, any update on Flanagan? It would be nice to know the persons that Deloitte has in its pocket who is helping them make all things possible, ’cause it ain’t the talent at the leadership level.

Since Deloitte’s consulting reputation is tarnished with the massive layoffs, are they trying to buy a new brand or distance themselves from their own brand. Companies like to sell/spin off bad brands and to reincorporate and rid itself of the negative image. Maybe Deloitte can spin itself off and rename itself Toilet and Douche.

SocialPizza — auditing, and I don’t mean ERS, doesn’t really necessitate any real education besides on-the-job training. The necessity of a bachelor’s degree is purely perfunctory. The vast majority of audit procedures carried out are rote, unsophisticated and can easily be automated if information system connectivity was there, which it will be. “I just work here” is right, that means auditing will shift more towards IT auditing, more towards computer science. There will be less need for warm bodies, i.e. accounting students that went through four years of an over-elongated curriculum that neither teaches the communicative features of liberal arts nor the thought processes of math and science. Margins will fall because the work is badly disguised menial labor. What’s happened with software development for individual tax preparation will spread to other areas of accounting.

Note: I do not fully support D&T in the way these layoffs have occurred. However…..

Is it fair that we villianize a company for making cuts if they are overstaffed? In certain instances (by no means all) some of the Deloitte offices just don’t have the work to go around. So do they need a reason to make cuts if they are overstaffed? My thoughts are probably not.

Again, you’ve brilliantly outlined an amazing idea for a Sci-Fi book. Better stop or at this rate someone will pick something you say up and write it before you can! I hope there’s a good plot, because “computers taking over the auditing world” seems a bit dull. Maybe throw a sex scene in?

Either way, you’re an idiot. Take your fairy tale business-world ideas and go somewhere where they’re appreciated. Or just go away.

Deloitte Tax has been secretly demoting partners. No announcement are being made. The only indication is the change the partner’s title in Outlook. Well respected tax partners being demoted to Tax Directors and even, Senior Managers. Tax Directors being forced out of the firm, via the you have X amount of time to find a job, which also allows Deloitte not to pay severance. Deloitte Tax is implementing the layoffs from a top to bottom and bottom to top approach. Gettting rid of the top people should save them a few heads at the lower level and again, avoid negative market exposure (but for this blog). The problem is that the lower level is filled with the “hated” Gen Y’s. By “hated,” I mean you should hear senior management trash the Gen Y’s (“ungrateful bunch”) behind close doors. Whoever said that Deloitte is not hurting in one of the posts above is full of you know what. Anyone know whether this firm is having its own balance sheet issues?

If this was a circus, you’d be the main attraction – the biggest clown. Get in touch with what’s going on around you. People here aren’t complaining about layoffs or how businesses are run in general…it’s how the layoffs are carried out within the Big 4 and the many flaws of the existing partnership model. These flaws are observed by people who have worked in this environment. Some of these are bright talented people and they have been impacted as well…I highly doubt these folks are ‘morons’.

For the unfortunate (fortunate?) many who have been let go from Deloitte … how has your search been so far? I was a career 2-rated Manager in PSW who was let go 6 weeks ago and it has been a struggle to even get interviews in this market? Being on the couch is worse than being on the beach. I’m in need of some inspiration in the form of success stories, etc.

@SocalPizza — people get messed up ideas. Back in the 80s people said how we would not need workers cause the computer would automate everything. Then in the 90s they said that we would not need programmers because code generators would take over the world. The logic never held water. Truth is, as one thing progresses, new opportunities open up. The niave who think auditing will be 100% computerized will eventually learn. It is a naive idea — but doesn’t seem to warrant name calling. You have good thoughts and ideas…don’t let them get to you… keep it up.

SocialPizza — Nostradamus getting a bit touchy huh? Whose the clown that said auditing firms will maintain their oligopoly state for the next “100” years? Look no further than that if you want ass-talking fiction. How many industries can you name that has the exact same structure as it did 50 years ago? You’re so short-sighted you can’t see beyond the tip of your nose.

@407, it does take a while to get interviews, as companies are moving at a snails pace. Even if the finance department has headcount needs, they now have to jump through all sorts of hoops before they can speak with you. The interviews will come and may come all at once (and overwhelm you). Even after the interview process starts, there are many more rounds (with long lag times) between the interviews. HR is not only useless with layoffs, but hirings too.

Rest up and take care of yourself until then. Exercise, watch a movie, and hang out with friends and family. Tap into your network. The economy will turn around. Some say that the economy has bottomed out already, so companies are just watching and waiting to make sure. Everyone is just trying to adjust to the new normal, after an extremely horrible scare.

@SocalPizza, perhaps your don’t realize this, but your posts are insulting, antagonistic, and not helpful. It is bad enough that people are losing their jobs in this economy. They visit this blog for information and support. There is no need for insults and name calling.

I’ve allowed some comments that have been negative because the posters had interesting thoughts in the past. But please respect the other readers. Comments that are purely insults and not part of a thread or having any other redeeming value will not be posted.
Francine

@407 – here are a few uplifting comments about being unemployed (for now):

1. Your chances are getting swine flu are much lower.
2. You can spend quality time with your family (which you weren’t able to do when the economy was thriving).
3. You find cheaper alternatives to things you enjoy, because you now have the time to do so. When the economy turns around, you will know how to save more of your income.
4. You realize who your true friends are and are surprised by the number of people who do want to help you.
5. If you find a job in-house, you know how you would manage the professional services firms.
6. Your body is getting hotter, because of all the exercising you now have time to do.
7. You find spirituality and become a stronger person, because you’ve endured and withstood a tough situation.
8. Your list of hobbies increases — i.e., spending more time doing things that you like — rather than working.
9. If you die tomorrow, at least your weren’t slaving away at the office and worrying about when (not if) the axe will fall.
10. You’ve expanded your network significantly through the interview process. Clients that would not speak with you when you were peddling Big 4 projects will now speak with you (in hopes of hiring you).
11. You can apply for multiple jobs at once (even things you would not have applied for before) because you don’t have to worry about your employer finding out.
12. Deloitte is paying you to sit at home and look for a job.
13. You can tell your kids one day that getting laid off from Deloitte was the best thing that ever happened to you because XXX

I am the Deloitte IT Service. Actually Deloitte has developed some automatic auditing tools which have been used for several years and more development is on going. Without disclosing too much “secret” I can give an example here. Try to identify a fake book, we can simply count the percentage of the numbers which start with “1” (one). There is a reason pattern. If “1” number are out of wrack, we can look into numbers starting with “5”…so on.. It is called “fuzzy logic”. Actually, it is what IRS is doing for years. They do not need accounts to do the audit!!!!

Even though layoffs are prevalent, employers may still inquire about the reasons behind your layoff. You can bet that Deloitte isn’t telling clients that it is their own poor management leading to the layoffs and that the layoff selection process has been purely political (rather than substantive). The innuendo being that there was something wrong with you, when compared to your peers. Be prepared for the question when asked. Don’t be defensive, but be ready to provide a list of references, who will speak up for you. At the end of the day, the employer just wants to make sure that do not hire damaged goods. Your references should be able to appease them. You may even offer to let the employers check references before speaking with you.

For the newbies that have been recently laid off and do not have the established network (i.e., references), you should contact your professors and let them know that you need a job and references. Professors are extremely helpful, and the schools need to know how you have been treated. There is no need to be embarrassed.

It is a disgrace that Deloitte not only dumped their employees, but are not helping the employees that they dumped. They are just trying to protect their reputation and pretending that they are a “going concern,” when they are not.

Whatever you do, do not come across bitter. Show your maturity by moving on and your quality with reference backups. Deloitte is going down the drain, and there is not reason to go down with them. The layoff happened to you, but it is not who you are.

Finally, when you do find a job, remember to help those who will soon be in an unemployed situation.

Many Deloitte Tax eval meetings are starting next week. Please watch the actors (I mean partners and their cronies) perform academy award quality performances. Remember, the real forced ranking will happen when you are not in the room (when its just the partners and HR). YE is May 31st. Thinking back … do you recall the partners acting weird at last year’s eval meetings? Now, you know why. Hindsight is 20/20.

@413-all the firms do these analytics (Benford analysis – as you have described – it not top secret). You can do all the analytics you want, and it does not automate the audit. It merely give new information to the auditors. They have to follow up on it and interpret the results. The only difference is that now a days we have a computer that can do all that counting. No one in the past would take the millions of journal line items and counts the ones beginning with a ‘1’, a ‘2’, etc… now that can be accomplished in a reasonable time. I am not an auditor – I do what you do. But no matter how good I get at doing that, the auditors still have a job. In fact, I just might be expanding their job more.

From a tax perspective, because I can’t speak to audit, take people who work on individuals for example. Sitting there all day and typing in 1099 and K-1s. There is no technological reason banks can’t electronically submit 1099s to the IRS, or that the IRS needs to receive the K-1 information twice (once from the partnership, once from the receipient). Eliminating these simple redundencies would result in tens of thousands of CPAs suddenly having no work.

Entity work is much the same. Take one of the most common book/tax differences out there, the meals and entertainment expense. If these expenses could be coded for tax deductibility as they went into the client’s accounting system, instead of some poor Big 4 staff looking over every line at 2AM, vast amounts of time would be saved. Depreciation expense is very similar. It would be trivial to code additions and disposals for book and tax purposes as they are entered in for the first time. But no, the custom is for the public accounting firm to completely recreate the depreciation records for tax purposes every year.

These are inefficiencies that would literally take seconds on the front end, and are instead left for the back end and take hours (and create a reason for Big 4 tax departments to exist).

One would hope that in fifty years society has managed to overcome these issues and move our resources to tasks that are actually productive and value adding. But perhaps I am overestimating the overall intelligence and problem solving ability of the accounting profession.

407 – Interviews have a pretty slow turnaround. I’ve been through 4 in a 2 month period. 2 are still ongoing, 1 I was totally overqualified for, and the last one made me an offer. It definitely helps to have some cash to keep you afloat while you look. I keep myself busy doing things that don’t cost too much: cooking at home, cleaning out/selling/donating clothes, books, CDs I don’t want, Netflix and Hulu, books, musical instruments and online language classes, exercise outdoors when the weather’s nice.

@418, sounds like you have the right attitude and are adopting the right measures in your situation. Even if you take a position that you are overqualified for, nothing says that it must be permanent. If you continue to maintain a positive attitude, you may be promoted and advance quickly in the organization. After all, you have no where to go, but up. Keep up the exercising, because it really helps you stay in positive spirits. This is a race, not a sprint, and you have to do everything possible to keep up your endurance.

The problem, for many of us, is that we have been brainwashed into believing that we must work 24/7 to be valuable. Now, we’re simply getting unprogrammed. You are right that the excess cash helps.

@417 — Auditing accounts work much the same way. Say you’re auditing interest income for a hedge fund client — you make a selection and then essentially recalculate what it would be by manually looking up the security on Bloomberg for the coupon payment, yield, etc and then put it in Excel and wash, rinse and repeat. TurboTax already has the ability to pull dividend/interest information from dozens of institutions just by having you enter in your login/password. If tests like these can’t be completely automated because of greater system connectivity in “50” years, then I’ve lost all faith in humanity. What’s another big test? Cash confirmations. Same idea. Inventory testing — widespread adoption of RFID will render the ad nauseam testing that currently take place a relic of the stone age.

@417-if there is duplicative data entry then you are correct… that time can be saved. If it is a matter of whether the company staff or auditor’s staff key it in – well it has to get keyed in somehow… computers can’t read it out of thin air. Once keyed in, who is going to check it and make sure it is accurate? Doesn’t it have to be compared to the hardcopy and validated. I am not in tax, but doing my own taxes each year I realize that the process should be one that can be automated. But computers do not think, and if we rely too much on things like a beefed up version of turbotax… then we will likely get in trouble. Most people depend too much on the automated banking, finance and taz applications. They make plenty of mistakes. If you are willing to accept those mistakes and pay them simply because it saves you time — fine, but recognize this happens. I once had a bank pay and bounce checks totally $10K… subtracting it from my account yet not paying the beneficiary. They aren’t foolproof.

Lessons for being unemployed — do useful things everyday, cut costs, allocate job hunting time but don’t dwell on it, and have some fun. These things will give you a sense of accomplishment, buy you time to get the next job, drive you towards that next job and still maintain some level of happiness. It got me through it – and in the end things turned out just fine… they usually do. @407 has the right idea.

From recent post, it looks that the Deloitte’s layoff would continue. However, I have not heard much layoffs except from the DC (Deloitte Consulting). It sounds the major layoff concentrated in March time frame. Do you think that the D’s head count is leveling off or it is only a temporary “cease fire” and another round of layoff is under preparation. There are some rumors which indicate another round in planned in June when the C closing its yearbook. Any comments? Thanks.

and for some senior managers to justify their job and salary by keeping all the hours to themselves and cutting the hours of everyone below….utilization is suddenly the name of the game and of course, grabbing all the big budget clients (managed revenue)…cut throat human survival…

I went to a few evaluation meetings at DT last week. OMG, you could see all the ugly side of human natures in those meetings. Personal attacks, nasty talks, pointing fingers… everyone was doing to everything to protect themselves, their own staff, and trashing the others at the same time. Plus HR was playing a bell curve game in the name of “fairness”, manipulating each staff’s rating number and forcing 80% of them to be rated as 3 or below.

After a meeting, I spoke to one of the senior managers. Here is what he said – “of course we had to do this, this is a jungle, we need to survive here. Why did I have to care the others? I only care what makes me a partner here. If you want to have a career here, you have to do the same thing. Fxxk the losers in there”….

Well, he is a “superstar” in the group. I am sure his future is very bright at DT. They need people like this.

@423 – from talking to a remaining contact at DT, last thing I heard was that they have been planning for a June round of layoffs for some time. That info is a little old now but with year ends going on, I assume there will be some fallout from those. Good luck….

How the other Firms handles layoffs. Once. And for all. With disclosure…

Bill Hermann, the managing partner at Southfield-based Plante & Moran P.L.L.C., confirmed Tuesday that the accounting and consulting firm laid off about 80 employees last Thursday.

“The layoffs were in all offices, in all job descriptions, in support staff as well as the practice staff,” said Hermann. He said he hopes there will be no more layoffs to come during the current recession.

“The firm’s in great shape. We want to keep it that way and, frankly, that’s why we did this. For the 1,600 people still here, we needed to make sure we remain strong,” he said.

“We let folks know that once we did it, we were done. It’s our expectation that we’ve taken all the actions we needed to take. It’s not a very good work environment if people are looking over their shoulders.”

Hermann said the laid-off employees were given a severance package “that’s between fair and generous, which is in the eye of the beholder,” as well as health care protection and a retraining program to help them find other jobs.

Hermann said a sharp fall off in business hit Plante & Moran in the second half of November.

“Obviously the economy is bad,” he said.

He said the company could have avoided layoffs if normal turnover patterns persisted, but they didn’t.

“Our voluntary turnover is normally around 10 or 11 percent. This year, it’s fallen to about 1 percent.”

It is drive people to crazy is not the layoff itself. But 2 other things: (1) how it handles layoff itself such as portend nothing happened. There people left every week. But D never says anything and completely “business as usual”. (2) how the layoffs are selected. Most people let to go are very good workers. Only their managers do not like them very much. The layoff becomes house clean tool.

@fm Pushed to the wall? Once GM files, Takedown is complete. Michigan is on the verge of a fall.

It’s hard to fathom the devastation in the current market, but it’s apparent that whether you are a highly skilled CPA or a highly skilled trades worker, layoffs will continue to slam folks across all industries.

Unfortunately, reading your blog, I get the sense that Big 4 firms are completely detached from the humanity they employ. To replicate the Plante & Moran model assumes candor, compassion and a willingness to lead.

I’ve been on the interview circuit (having recently been laid off), and the potential employers have discussed their own layoffs with me. However, as a general rule, the employers believed that it was best to be honest about the state of their business and implement the layoffs at once, rather than bleeding in the layoffs slowly. The remaining employees are less inclined to worry about the axe falling on a weekly basis and can concentrate on their jobs.

Deloitte, on the other hand, is another story. D stands for dishonesty. There is no need to lie to your employees so that can surprise them with the layoff and seize their computers.

A former high-performing colleague recently informed me that he received extremely negative evaluations as part of the year end evaluation process. This person has been with the firm for 4 years and suddenly, became a useless, worthless worker. Coincidence? I think not! They are trying to push him out of the firm. They likely want him to leave voluntarily to save on severance. If he does not, they may claim performance issues and not pay him a severance. This is not capitalism, but pure abuse of those in power who can abuse.

By reading all the 430 comments above, I am sure that people are furious about the way D handled the layoffs. But looking at the good side of this, the whole thing shows the “true color” of those partners in the firm, right? During good days, they could talk and talk, BS after BS, that how much they “cared” about people. Everything was the “People” of Deloitte & Touche. (Remember that slogan?) Now when the time we really need them to “care” about, where are they? They all suddenly disappear. Everything is about business now… And, please stop doing the events like WIN, AAA, or any of those diversity PR shows. Why don’t they just save the money that way so they could keep one or two jobs for woman, Asians and other minorities?

Rumor around that D is planning to offer sabbaticals to 1 and 2 rated employees with 40% paid (not bad, right?). The rumor has been around for a while, but they have not announced it yet. People are saying that they want to wait until the year end evaluation to be done or they want to wait until the next around of layoff to be done before the fiscal year. If this is the case, the purpose of the sabbatical is not be served as an alternative of layoff or saving cost, it is more like another PR show. Keep in mind that only about 20% of the employees were rated as 1 or 2 during the latest evaluation, D cannot really save that much money from the sabbatical offers. I feel sad that they could not do it earlier.

On the other note, D’s PR machine has been very quiet lately. I guess that they are also waiting for the layoffs to be over so they can start a new campaign to rebuild its damaged image. Lets see what happen after May. There is pressure to finish all the layoffs before the new fiscal year.

Greg Durrant – NE Regional Managing Partner of Deloitte sent out a video last week giving an update on the “People” of Deloitte. He started by saying these are very difficult times. What is the Firm not doing? It won’t be cutting 401K matches or resciinding offers made on campus. What is it doing? He said the firm is retraining recruiters to work on finding positions for “colleagues who have been impacted” by the economy. That’s where we come in, he continues. We work with the clients. We understand what their needs are. In essence, in addition to auditing, we all are to become headhunters and send those positions to a contact who will post them on our Alumnet. In fact, according to Durrant, there are now over 1,000 positions on Alumnet for “colleagues who have been impacted” by the economy. Closes with a reminder that we should try amd ensure they stay “coworkers for life.” No mention of how the colleagues happened to be impacted, or the extent of their injuries. haha

My opinion of the firm is pretty damning overall. To be fair I will say that what @435 is talking about is at least a step in the right direction. I’m not going to change my opinion or start cheering, but that is at least some sign they care and might be moving in the right direction.

@437 – if by “care,” you mean that they “care” about their partner unit value being adversely affected, I would agree with you. Saying that they “care” about their people is laughable. The bitter, angry, etc. D people that were laid off find employment — many with clients. Hmmm … now that the casualties impact and control the purse strings of the client, D “cares.”

10 months after initial layoffs? My group had first layoff back in January 2007. I lost 3 of my co-workers in that batch. Now looking back, they were the luckiest ones because all 3 were able to find a job within a month while the market back then was still good. Wonder why people are so angry at D? If those stupid partners made up their mind at that time, and did one big layoff at once, the ones got let go and the ones still stay would have been much better off now.

5 layoffs and the 6th one is coming in few weeks… Yeah, they really care!!!

I just have a question. Most of layoff comments here were about DT. What happen to the other big4? Did they have layoffs? For example, I haven’t read anything about EY… Are they that good? Or are all their employees happy? I just don’t believe DT is the only one with all these problems.

I am a manager at one of the major KPMG offices. Of course, we do have layoff across the broad; however, from what I’ve observed, KPMG hasn’t treated people with such disrespect (at least, in my office and the other major office nearby). Of course, nobody is going to be happy about being layoff. But, I don’t see the layoff targeted on minority group or just one particular level. I don’t see people got escort out of the building or got no time to pack their personal belongings. I see both the tax and audit practices give employees one extra month pay without work and advise them to start looking for jobs and give them enough time to pass on their projects to the managers or co-workers. I don’t see partners trying to trash employees’ performance for the sake of trying to get rid of them. The firm’s leading partners openly telling the whole firm there are layoff coming at the beginning of the year. I know the local office managing partners also clearly indicate there are layoff coming. The process is handled professionally overall, at least, base on what I’ve experienced. (I don’t rule out there are unjust and unfair stories in the layoff process. But, I haven’t seen it and haven’t heard of it personally so far). In one of the partner and manager meetings I attended, some senior partners ask the managers to recommend the potential layoff employees to clients’ opening positions.

Personally, I often communicate with my friends at EY and I was told they handled it similarly. Even better, as their partners are aggressively trying to put their potential let go employees to their clients’ opening positions. I guess that’s the reason why EY has most of the key accounts at this area.

I know our firm often watch out what other firms are doing. Maybe DT set an example of what not to do for the other big fours.

Based on LinkedIn profile changes, I have concluded that PwC continues to lay-off … excuse me, I mean separate under-performing Directors, from its Advisory line of service. It may be happening at other staff levels, but I’ve noticed several “updates” to PwC Advisory Director profiles. The “separations” appear to be related to the mid-year evals, but I do not know that to be absolutely true. I believe it was last year that PwC laid-off 120 Advisory Directors, and said that was the end of things ….

I was also told recently that PwC “realigned” by moving Internal Audit Services (IAS) from Advisory back to Assurance, reversing a “realignment” made circa 2005. That move might make sense, as the IAS SOX revenues have fallen dramatically for all the firms, and the “pull-through” Internal Audit model never really worked all that well. (It’s another example of Big 4 theory not matching reality.) I wonder if the deepening losses of IAS/SOX revenue drove a recalculation of the PwC Advisory “leverage model” which led to the Director layoffs?

Anybody from PwC want to comment? Any ex-PwC people recently “separated” want to comment?

Thanks for the input. The PwC way (for the FS assurance practice at my former office at least) seems to be for the office managing partner to stand in front of everyone at quarterly meetings and reaffirm that the firm wants to be the “only one” not to have layoffs during this downturn. Then three weeks later you see a coworker being escorted out by HR. Seems it was a “performance” issue, and despite their four years of service no severance is given (fired them on 27th of February…benefits terminated end of month…ouch!). Once indvidual is removed from premises begin character assasination to ensure everyone knows that this person just wasn’t a good fit (gotta keep morale up). HR will then reach out to individuals who had a supervisory role with the “departed” and remind them that it is against firm policy to act as a proffessional reference for employees who have been terminated. Repeat this process every three weeks or so (and once again I’m only speaking form my LOS in my former office). Targets thus far have been experienced associates and seniors.

@ 441, you said “I see both the tax and audit practices give employees one extra month pay without work and advise them to start looking for jobs and give them enough time to pass on their projects to the managers or co-workers”. Is that real? I almost had a tear in my eyes when I read it. Compared to DT, KPMG sounds like a charity. Our DT partner were much smarter, they calculated it and made sure their staff got laid off right after the audit files were archived.

You know what was DT’s problem? They started it with a small batch of layoff about a year ago and hoped it would be over. But when the economy was getting worse, and they lost more and more clients, they got panic and over reacted. They went back to their “economy models” and change their “plans” again and again. As a result, they laid off more, and more, and more people, slowly. To the end , because they got rid of too many people (excessive in many groups), the selection of layoffs became so political, nasty and painful. Some partners /senior managers were using it to drive out their competitors. Some partners simply picked their candidates because “the kid pissed me off 6 year ago”.

I am glad to hear that other firms were learning from DT. At least someone is learning…

426 – Thanks for the insight on the peering process. I get a lot of wordy, but ultimately empty explanations of this proces, but the words spoken “behind closed doors” are more telling. I don’t have a problem with people sticking up for their staff/seniors when they deserve it – I expect them to.
However, the senior manager you described takes a “promote my favorites at all costs” mentality, which I would bet many of us have seen at our firms. It doesn’t have the firm’s best interests in mind, and in the worst case you can lose quality people who simply didn’t have a good enough cheerleader.

I never understand the personal attacks after someone leaves – it’s unprofessional, and it shows poor leadership.

[I originally posted this under the PwC Layoffs section but I think it would do some good here as well…..Btw, you are entitled to severance per the employment contract if you’re performance coached out, as you weren’t in violation of “professional, legal, ethical or Firm policy”!]

In this case, the “KYC” would refer to PwC knowing their contracts, meaning their employment contracts….

I’m tired of coming to the comments section in search of something tangible that would help people who feel they have been wrongly terminated or treated abhorrently while employed at BIG 4 and finding vague numbers on lay-offs in vague groups, vague statements about legal recourse, etc. So, I decided to post this, hoping it may help those already let go or those soon to be departing from PwC come the end of the FY09 review process.

VERY IMPORTANT FOR EVERYONE AT ALL FIRMS, PWC OR NOT, TO KNOW WHAT YOUR ENTITLED TO SHOULD YOU BE “PERFORMANCE COACHED OUT”!!!!!!

This is the actual verbiage from a client service manager level employment contract at PwC:

“5. Termination of Employment.

a. Termination by the Firm. If your employment is terminated by the Firm for reasons other than professional, legal, ethical or Firm policy violations, you will be provided under the Firm’s Notice/Severance Policy for Certain Employees (the ‘Severance Plan’) with: (i) one month’s notice, if you have bee employed for more than six months but less than two years; (ii) two months’ notice, if you have been employed for more than two years but less than five years; or (iii) three months’ notice, if you have been employed for five or more years. The Firm reserves the right under the Severance Plan to pay your base salary in lieu of continued employment for any or all of the applicable notice period.”

I was told by a partner that the Feb 08 manager/director “reduction” provided 6 weeks severance to those individuals across the board. 6 WEEKS??? Talk about a random number (seems like A LOT of things at PwC are pull out of thin air these days). I’m assuming a director would be due a better, if not the same, severance per their contract. And, I’m pretty sure that not all these people were employed for less than two years (I can actually think of one director I know who most definitely wasn’t). And, I’m also pretty sure these people were all taken by surprise, meaning who the hell would know off hand what’s in their employment contract when they’re being fired AND who the hell would probably think to look at it in the few hours they give you to pack up your sh*t and “separate” from the Firm.

PwC, I’m sure knowingly bets their “HOUSE” that most of their employees will not know what they’re entitled to so they offer their random 6 weeks severance off the bat. If you don’t know what you’re supposed to get, good for them. If you do, well, they won’t believe you (HR that is) so make ‘em dig up your contract. Or, call PwC SSC (HR Hotline 866-470-3000) to get it yourself. If you’ve been let go, wouldn’t hurt to see if they gipped your or not. I’m assuming they would have to provide a copy of it to you, current employee or not, and if they don’t I’m pretty sure you know why.

From what I recall, staff agreements probably provided for the 6 weeks but it may have been staggered by years of service as well for these levels. Maybe they were generous with Associates/Sr. Assocs but my hunch is they weren’t!

If you weren’t given what you were due per your employment contract, it may be worth looking into suing the Firm for breach of contract. I’m not sure what the statute of limitations would be or if it even is a valid claim but weren’t the AIG “Bonus Guys” threatening the same (on a much bigger scale of course)? Wouldn’t it be something if this turned into another big scandal for PwC…

FM does a great job with her site, providing valuable insight and content, while not specifically naming names, at least pointing to the Firms whose practices are pure CRAP. But let’s not make FM shoulder all the burden. I hope people who read this site will at least provide what info they can, being as specific as you can while keeping your anonymity, to help others who may be struggling with some sort of blatant BIG4 injustice.

To the PwC Partners who read this blog, get your (sh*t)House in order. To those still employed and either loyal on the partner track or just happy to be out of the unemployment line, remember you’re just a number away (3 or 4 take your pick) from being “coached out.” Know where your true loyalties should lie. To those already out, if you have any information that is TANGIBLE, why not share it?? You don’t have to name names or be too specific, but really, you’re out, so what do you have to lose?

@69 [under PwC Advisory Layoffs post] Closet 4s??? Hmmm, maybe someone should take a look at HR or the parters giving HR directives? How is it that HR or the partners don’t know the standard severance for each level? Really, given that this coaching out is even occurring mid-year now there, how many tag team HR/Partner conversations will it take before you can “Retain” (pun intended, dweebs) that info?? Perhaps, the closet cleaning should start there??

@FM, thanks for your blog! Also, might be helpful for some to re-post this under the DT layoff section and/or your What I’d Do post….

Confirmed — numerous Deloitte international tax partners demoted to senior managers based on Linkedin profile updates. Deloitte demoted these guys to senior managers so that can’t share in the partner profit pool (leaving more in the pot to split with the remaining partners), then will fire them later. Much easier to demote then fire, rather than simply vote out a partner (needs 2/3 majority vote). More classic Deloitte strategies.

Check out Deloitte main webpage. They keep giving advice on layoffs to justify their own. Layoffs are fine (in a bad economy). Stop being so disgusting underhanded about it.

To the man in charge at Deloitte, stop trying to hide it. Everyone already knows and are disgusted.

I read a post above speculating about additional D&T layoffs. I can say that in our mid-sized office, we can’t get staffing right now for our jobs, and it’s the summer. Even the managers, senior managers, and partners are frustrated that we just laid people off and all of a sudden we don’t have staff and seniors on jobs we knew we had months in advance. We aren’t hiring much, but I feel pretty confident at this point that our office will not have audit layoffs for a while if only because we are really running a bare bones crew.

The smarmy and dishonest “smartest guys in the room” approach to layoffs by Deloitte is what really chaps peoples asses. Chuck Daly, former Detroit Pistons coach was once quoted as saying “There are two groups of people you cannot lie to: children and NBA players”. You can add to that Deloitte employees (both former and current). Dear Mr. Straight Talk, please practice what you preach. Also, please take a look in the miriror and maybe call to the carpet some of your “leaders” who are responsible for many piss-poor decisions, sloppy management, cut-throat culture, etc and please stop hiding behind “the bad economy” excuse (which is only part of the story).

Same for my DT office as well. Plenty of work to go around at this point. We are actually seeing some wins come in from the marketplace…which for quite a while was not happening. This has been very good for moral…we needed it.

Good, 452. Uncle “D” will then pay double the price to hire back (if they can) the talents they dropped. Those willing to return will work so hard for Uncle “D” the second time around, because they know how Uncle “D” rewards its top performers. Uncle “D” will either have to raise rates or the partners will bear less profits on those engagements. I bet against the latter. The clients won’t pay the extra fee, so Uncle “D” will play the same type of dirty bogus game to ramp up the invoices. Since Uncle “D” has increased the number of “friends of Deloitte,” it will be so much easier to market and win. Now, who can argue against this formula for success? Not any of the remaining partners.

By the way, if you are one of the one’s being targeted by Deloitte for layoff this round, where they are playing dirty mind games with you to convince you that it is better for you to resign, DO NOT RESIGN. Stay on and make them pay your severance. In this economic environment, companies understand layoffs, especially if you are from Deloitte. If things do not seem right, get a PLAINTIFF’S (translation = cannot be bribed by the firm) attorney to watch out for you. Deloitte plays dirty games (has played dirty games for years), and you should get help.

A little bird has told me that Deloitte Tax continues to quietly strike deals with individual partners/others at the moment. Some tax partners are being demoted, while others will “resign” and take 1-2 agreed upon SMALL clients with them. The 1-2 agreed upon clients will be one’s that the firm claims are no longer worthy of being served by Deloitte. Keep an eye out for supposedly partner “resignations” before the end of June. Those departing under these terms will still technically be subject to the firm’s non-compete provisions (excluding the agreed upon clients) and non-disclosure clause. They are allowed to tell their clients that they have separated from the firm, but any more detail would be a violation of their agreement. So, Deloitte continues with its abuse, but has managed to contain the continuing trashing of its name.

After 8 weeks separated from D, received 2 offers today and both are better than paid by D and better positions too. Except the 6 weeks of vacations, but I negotiated the 4 weeks. Life is still going with or without D. Talked friends left behind, they are so much stressful to hang-on for the pay checks an visa status.

I heard the layoff for ERS on the West Coast has started last week. Some managers and senior managers have received the letter. But they did it very quietly. I am sure the same thing will be done in other offices as well.

Also, don’t be surprised that some of your partners and directors will disappear mysteriously after 5/31… they are also doing it very very quietly…

D can’t continue the “bleeding” anymore instead of taking a decisive action. If the situation were last another year, many employees, who remain, may end up with stress mental disorders and it would cost D’s quantity and quality of works, as well as medical related bills. Actually those fired or laid off people would have an unexpected benefit which is being liberated from the stressful environment. Even though, they are facing unemployment and job search, it is still better than waiting for .,.. inside D.

“Though the results are loud and clear, the numbers can’t really capture the dedication and commitment I witnessed on my engagement and office visits this year. Naturally, there is opportunity for improvement, notably in career-life fit and rewards & recognition – two areas that surely suffered because of the tough economy. But know this: Your AERS leaders are extremely grateful for and proud of the immense effort you are making. My hope is that soon we will look back on this moment and say with pride taht we succeeded in the face of tough odds. So, thank you for all you have done.”

In trench speak, yeah we know your career/life balance sucked and we didn’t pay you – but we’re grateful and proud of you. haha

If more reductions are to be done before fiscal year end, then I’d guess May 21st would be a good date as any. They wouldn’t have to compensate for Memorial Day, and since a good chunk of people take the Friday before off, that Thursday becomes a good date as any.

@465 – D’s making room for the new Sept (or whatever deferred date was agreed to) hires. They don’t want to rescind offers and ruin their relationship with the pipelines (i.e., the schools). Someone should call the schools and alert them to this practice. Professors who advise students about career options should have all the facts, not what simply what D wants them to believe.

The rumor, which has been passing around for awhile and very intensified recently, that a major round of layoff which comparable to the March round would happen in the next several weeks, especially in the end of May. Does anyone here have further information?

As a may grad going to work in big4, some interesting observations of my fellow new hires:

1. Nobody has any idea of the current state of the firms. hardly any new hires try to find out anything– its hard to do with no mainstream coverage and the hear-say in blogs is taken with a grain of salt. (Early professional skepticism!) I’d assume so long as the schools aren’t raising the alert level, the majority of top accounting students will still make their way to Big 4 if for nothing else than higher pay.

2. Many are on accelerated plans to pass the CPA. I know several who will have passed the exam before we begin sometime this fall (dec. grads). Many, myself included will have passed 2-3 sections before starting. We hear that many of those laid off had not passed the exam, and so it seems like a good way to keep our jobs. This “educational arms race” may be good for the firms in the long run.

1) Accounting programs & school career centers need to have good job placement statistics. It’s quite easy for firms with large recruitment and marketing budgets to spin the “experienced” crowd as embittered, or a bunch who “couldn’t cut it.” Professors who still practice, and have nothing to lose, are quite happy to share what they know, like the rest of us do on this blog.

2) This “educational arms race” you describe may likely be applicable from the just-graduated level and maybe up to the early senior levels. As this crowd advances to the upper senior, manager, senior manager, and director levels (most of whom have passed, have a lot of technical and industry experience, and some sales experience), the firms/partners boot many of ‘em out and start all over with the cheap just-graduated crowd again.

A good safe harbor in the Big 4 is not to get on any “shit lists” – i.e. not being a CPA, not being compliant with various “check the box” requirements, etc. That combined with decent performance eliminates you as “low hanging fruit” when they go to do layoffs. Nothing truly makes you safe, but it is really easy for them to see someone who isn’t a CPA and isn’t in with all of the bureaucratic details as a headache to get rid of.

@470, I love how you call passing the CPA an educational arms race. So what happens after you pass it? What’s the next big thing? The partnership doesn’t care if you have a MBA or any other tertiary education. They might even actively discourage it since they want to pigeonhole you into one area to develop “expertise.” The arms race is more like a 40-yard dash into a wall.

It’s a total guessing game, but I don’t think passing the exam will save someone if that’s all they have going for them. It’s more a hurdle that must be passed or otherwise they will use it against you as a 2nd or 3rd year. I guess if they are down to a few people who are otherwise the same, the person who has passed the exam might be allowed to stay, but I don’t really imagine that kind of situation happening in reality.

To whoever posted that BS article about Plante & Moran’s layoffs, quit dreaming. They are absolutely known to have the same cutthroat approach, kill em off approach as any CPA firm. They have been shedding “underperforming” partners for several years. They just don’t get the press that the national firms do. How much clearer could it be that they simply released that statement to make them sound like the caring, family friendly firm they were in 1985? Their spin machine is alive and well.

The rumors about the D&T layoffs are true. I got canned today along with a number of other unlucky ones. The Firm’s fiscal year end is coming up next week and they wanted to get this done before the beginning of the new year. From what I can tell this round of cuts was comparable in size and scope to the round they had just two months ago in late March.

The good news is that they did provide a decent severance package and they handled the layoff process professionally and with courtesy (no being escorted out the building or hurried out the door), they let me leave at my own pace and I was given plenty of time to inform colleagues, clients and gather up any personal files.

The bad news is that I doubt that this round of cuts will be the last. From all my talks with partners before I left today it seems that everyone expects more cuts to come in the not-so-distant future. I wouldn’t be surprised to see another round of layoffs come late August (promotion time).

Thanks for the sentiment bender. The people who were cut today, myself included, had good ratings and were well regarded. But after you get rid of all the 4’s and 5’s and you still need to cut some more, well then the 3’s become the next in line for the chopping block.

@481 – Philip J Fry, hopefully you take another thought of this. It may be end up better than hanging there and waiting for the ax. I was let go in March. I have been enjoying staying with my family and done a lot of house work, which I did have time to do. I have also been enjoying the job searching, which let me know many new people and refreshing my skills. I found a good job and will not start until next month when my package runs out. Good luck.

@485 – to clarify, when I say partners had hinted at more cuts to come I’m not talking about any formal announcment from some big shot in a leadership position, I’m referring to those partners/directors/sr.managers that I’ve known personally who speak frankly and off-the-record. They don’t know for certain that there will be more cuts, but their general view of the situation based on their own understanding of the state of the firm (and they’ve been pretty accurate in the past) is that headcount reductions and other cost-cutting measures are not over. Until this recession ends expense management will be high on the agenda and employee compensation is the biggest expense they have.

I have been posted on this blog for a few times and mentioned that the layoff in May was coming. And I can tell you, it is far from over. There will be more layoff in Aug/Sept, and there will be more toward the end of year. The timing and size of layoffs will vary from group to group, office to office and region to region.

The senior leaders at DT are the most incompetent management I have ever seen. During this economy downturn, they have absolutely NO idea what to do other than getting rid of their people. If you have read this blog and almost 1000 comments about DT layoffs, did you ever wonder what the hell those senior leaders have been doing for the past one and half year? Is it the time for some senior leaders to step down? Barry and Sharon, it is time to have some real straight talks with your senior partners…

I received a meeting invite to meet with the HR and a partner tomorrow morning. I guess my time as come for Deloitte.

Based on my personal experience, I concluded that it was definitely an eye opener. It was a pleasure meeting so many great people in this company but unfortunately it was cut short. However, the experience I gained definitely tell me that Deloitte (or maybe Big 4 as matter of fact) is not suitable for me. The reason is, I am an auditor and my best interest is to ensure compliance being practice and to create efficiency whenever I can. In this case, ensuring compliance is based on the budget and efficiency can cause you to have lower utilization (since you’re so fast, we don’t need you anymore. Please sit on the bench and wait. Thank you). I honestly do not see a logic in that.

I am not going to be sad, but I am going to stay strong and be positive about myself. It is not the end of the world, but a beginning of a new chapter in life. I probably need to work with a team that practices better compliance efforts and also appreciates my efficiencies. I am thinking DCAA since they’re so stringent with audit and PCAOB since I am so detail oriented and ethical. 1 is 1 and 0 mean 0.

To those that were/going to be affected by Deloitte. It is not the greatest place to work anyway, so be happy. At least we a great severance package and also an opportunity to venture somewhere where we will be better appreciated.

To new hires, good luck. I have been working/networking with higher management in Deloitte and I can tell you that they have no idea, direction, compassion for you/audit/compliance/anything else in the world but money. Trust me on that. I know.

BTW, thanks for all the tips on what to do after the layoff. I am going to enjoy life, continuosly look for jobs and be happy. Life goes on, eat now – Garfield.

And to all those out there that may have been cut,are anxious about where and what to do,take heart,the UNDERDOG does win too.For those into popular culture and TV,Tuesday and Wednesday night saw the UNDERDOGS win.

I was layed off from D&T in March. I have always performed well 3s or higher. Upon returning from maternity leave last year, I requested to go on flex time (work less hours) and got flat out denied. The reason (“we generally do not let seniors on flex”) I knew several ppl that were seniors when they started their flex. I was shocked needless to say, cause this is a very common benefit when recruiting. A few weeks later I was called in to see the partner who claimed I was not performing up to expectation, what the heck!! That was the first time I had heard thisfrom anyone (my clients love me, the managers always say I do a great job). Upon asking for more details he just said that there is nothing specific, its just comparing me to my peers, I was not on the same level. What a lie!! Anyway, a few months after I was called to the partners office again and was told I was being laid off due to the economic downturn. Luckily he did not mention anything about performance or that would have pissed me off. I cannot believe the company I so loved when I started 4 1/2 years ago has turned to one I so ate and am disgusted by. I know I am better off, but I hope ppl will not fall in the same trap I did. (oh and did I mention I was african american).

It looks that D will use the year end review as the tool to achieve the headcounter reduction. What they are going to do is that you will artificially push more employee to 4s and 5s ratings by a quota system. Then they can fire those 5s with low or no separation packages. Then put those 4s onto the PIPs which is so stressful and hopeless, those most people on those will quit anyway. It is a shame.

I think this string needs another start – it’s almost at 500 & the word is out that layoffs have started again (maybe the owrd should be more like: they never stopped). I just heard of an entire department being realigned.

Hey – can everyone take a reality check on performance ratings – if you get a 4 or a 5 @D then you are already underperforming to the point where I have a hard time understanding why you still have a job. Better yet, why have you had a job for the past year, because, let’s face it, no one just becomes a 5, it’s a long term state of mind.
Next in line is all the complaining 3s. A 3 means you are average, period. You are not a standout. You are not exceptional in any way whatsoever. In fact, all you are doing is showing up, mostly on time, but possibly not, and just working. Not doing anything extra – not going the extra mile.

Now that we have that straight why you got the performance rating that you did is a completely different question. Perception, politics, backstabbing and a host of other reasons all contribute to your performance review rating.

Then there is the formula: there can only be one 1 per engagement and where a partner has multiple engagements they are only allowed a certain number of 1s in total. On top of that some of management uses the performance review in order to bypass the year-end rate increase so you could lose out on becoming a 1 if your management wants someone else to get a bigger raise then they would if they were rated on their actual performance.
So there it is, or at least most of it.

Your rating review designation is only a number that someone gave you based on their agenda, not yours, which I assume is career driven.

It is very typical behavior for a large company especially when it is a down turn. It is because that most people were spoiled when it is a good time and lost competitiveness, When the economy turns downhill, people are desperately protecting their job and their life styles. The only way they can do it is to push out others. It is why people suddenly changed so much.

[…] in their workforce during the last three years of all the Big 4. They were the first to admit, on re: The Auditors, that thousands of cuts were made to respond to the economic crisis. A woman who believes in […]

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Francine McKenna (@retheauditors) is the Transparency Reporter at MarketWatch.com, a Dow Jones publication, where her work is also featured frequently in the Wall Street Journal. McKenna had more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad before becoming a journalist. Look for her prior columns, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. For more information contact Francine McKenna, fmckenna@mckennapartners.com